Sales Tax On a Used Car - Is It Wrong?
 

First off - I will state plain and clear - I hate taxes - and yes I AM trying to find a way to get out of paying sales tax on a car - but I am NOT endorsing fraud.

I bought an 07 Ford Mustang 6 months ago - and when I put the agreed value on the form, they charged me 7%.

It's for sale now (14000, South side Indy if you're interested haha) (because I found a Corvette that I'm JUST short of having the money for) and if I get the Corvette - I want to spend the least amount of money possible (because insurance is going to kill me as it is haha)

But then it dawned on me. Seeing as sales tax was payed on the car when it was originally bought - is it not double taxation to have tax payed on it again?
Does anybody else think that is wrong?

I can understand paying the tax if you're buying from a dealer, but I mean person to person - is that not wrong?

And is there any LEGAL way not to have to pay the sales tax? If I put one dollar as the agreed value - the IRS and BMV will be all over me.

Thanks

Depending on the state you are in, you are not paying tax on the car itself, but on the money transaction. Depending on your state, your state is taxing financial transactions. It would only be double taxation if you were charged tax twice on one transaction.

But again, states handle this differently and it can be confusing. :yep:

You might want to talk to a tax dude or dudette on this considering you only owned the car for 6 months.

Sales tax is a tax on the sale itself, not the product. Every time a sale is made the tax has to be paid, hence "Sales Tax".

I don't like it either, but there it is.

Couldn't you give it away and the person you gave it to sent you a financial gift?

I know....probably illegal but I do agree with you seeing as how you've only had it 6 months.

We have a nasty little tax in the UK that goes by the name of VAT (Value Added Tax) and that has recently increased from 17 1/2 to 20%

I once worked for someone who would buy high-priced auction items in California by having a friend in a state that had no sales tax bid on the items, buy them, have them sent to the friend, then the friend would send the items back to California. I am sure this is all very illegal and I have very little doubt the authorities caught uo with them.

And they're trying to do that here in the USA... Man, first gas hits 4.20 for unleaded, and I don't even like pumping that. Now taxes are seeming to rocket (maybe I've just been buying and selling a lot lately) - I don't know what I'm going to do - especially now that I am considering making a small business off of buying and selling muscle cars in the midwest region.

The state of MD Motor Vehicle Administration will ask what was paid for the car and apply the sales tax. There is a minimium the MVA will take. Something like $400.00. So, if you paid $85000 one simply tells the MVA $400.00 was paid for a 1969 completely restored Super Bee. :DL You get our tags an go home......after 5 hours on line that is. :shifty:

Fraud - it's a wonderful thing - is it not? Hahaha

The Nevada DMV will ask the same question, BUT you gotta show a bill of sale. :wah:

If the sale price is too low they will use a Blue Book figure.
The crooks are gonna get their money you can bet on that.

Magic