PorscheStrong

I just received a letter from the State of PA notifying me that I appear to owe additional taxes relating to the purchase of my 2009 TT from over a year ago. Note: State of PA applies 6% sales tax on vehicle sales; no property tax at state or local level. While I purchased the car at arms-length from a dealer in CA, it seems that the State of PA believes I bought the car for a price that is materially below market. To be sure, I would say I paid a very full and fair price for a mint car, by no means a bargain; but the State's valuation is high enough to give a chuckle (~15% above purchase price -- high enough to make me think I should offer to let them buy it at that level!). As a result, they'd kindly suggest that I promptly remit payment for the taxes on the delta, or otherwise face their wrath! Adding further insult to injury was the value quote from my insurer at the time I bought the car, which was ~10% below purchase price, requiring my to effectively self-insure part of the risk, since declared value policies carried a considerably higher premium than our current insurer. It seems value is in the eye of the beholder (or their wallet), and the State of PA is clearly desperate to fill their coffers.

I've done this dance on real estate, but anyone been through it on a car -- particularly on sales tax?

TT Surgeon

Similar experience in NYS when I bought a 930, basically gotta pay up.

TTurboRoo

Why don't you contact them and ask them exactly what verification of value they need and send it to them? I have been through this with cars and airplanes both in a couple states and have had to file affidavits and provide sales receipts on appeals, but never paid tax on more than I actually paid for something.

Typically, if you did not purchase the vehicle in the state in which it is licensed, you do not actually pay sales tax at all, you pay "use tax" in the state in which you license it. Which is essentially the same thing, except in some cases, it may be calculated or applied differently for "vehicle licensing" which is exactly what you are paying the hosting state the use tax for!

In any event, if you bought that car from a reputable dealer and already paid your state, the tax on the actual purchase price of the vehicle. I would offer to send them back a letter with copies of your paperwork and provide them with copies of the sales documentation and tell them to have a great day. Let's face it vehicle value is dependent on condition and subjective until someone cuts a check and someone else writes a sales receipt. Would an 09 997 turbo with front end damage sell for or be valued at the same price a mint condition car would be? Of course not.

If it were a private sale and handwritten receipt or some other less than verifiable transaction you may have an insurmountable problem but a dealer sale with all documentation should provide you with complete verification of "value."

jhbrennan

Even in a private sale, if a "self-prepared" bill of sale weren't sufficient, there should be some payment documentation to support the price on the bill of sale - financing documents, bank wire transfer, etc.

TTurboRoo

Sometimes a sellers affidavit will be the answer on a private sale but this one should be not an issue with the Dealers Report of Sale!

Terry Adams

Had an issue in Holland. Tax guy wanted the 19% VAT on the new price of the car, which we had bought tax free, driven for 18 months, and were shipping to the US.

Told him I might have a non injury accident and the car end up in the canal, then he could decide what value to use.

He said if that happened, the fine for polluting the canal was very high.

So I sold the car and the next guy paid the VAT.

Tax people the world over are the same. Lower than pond scum.

aa909

Municipalities across the country are broke and state pensions aren't funded... They're coming after every dime they can "justify" and stuff like this will only get worse over time.

OP, As other's have mentioned call them and provide documentation of the sale's price. GL and keep us posted.

CodeRed

In Calif they are relentless...over reaching at every chance. So called civil servants, my a$$

PorscheStrong

Thanks for sharing thoughts. Update from this end: I spoke to someone in the State Department of Revenue. Thankfully, given the fact that it was purchased at a dealer, it's a fairly routine matter -- I just have to send them a copy of the Bill of Sale and the matter will be resolved. Sending it off today, and hoping to hear nothing further.

TTurboRoo

Just what I thought! Have a Hoppy Day!

Rex
www.wallabyranch.org