Sales Tax On a Used Car - Is It Wrong?

Anthony W. · 05-07-11, 11:54 PM

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

TorpX · 05-08-11, 12:31 AM

I don't know what the laws are in IN, but there is no doubt you would be worse off in Illinios. I doubt you can get out of it. My only advise is to be careful who you vote for.

Platapus · 05-08-11, 10:39 AM

Quote:

Originally Posted by Anthony W.

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?

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.

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

Sailor Steve · 05-08-11, 12:59 PM

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.

Jimbuna · 05-08-11, 01:08 PM

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%

vienna · 05-08-11, 03:56 PM

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.

Anthony W. · 05-08-11, 04:31 PM

Quote:

Originally Posted by jimbuna

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%

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.

AVGWarhawk · 05-08-11, 08:51 PM

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.

You get our tags an go home......after 5 hours on line that is.

Anthony W. · 05-08-11, 08:53 PM

Quote:

Originally Posted by AVGWarhawk

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.

You get our tags an go home......after 5 hours on line that is.

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

magic452 · 05-08-11, 11:36 PM

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

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

05-07-11, 11:54 PM	#1
Anthony W. Grey Wolf Join Date: Feb 2009 Location: Central Indiana Posts: 850 Downloads: 130 Uploads: 0	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 __________________ Sunken Mustangs Proud Ford Mustang owner "Damn the torpedoes! Full speed ahead!" - Admiral David Farragut Run silent - run deep - keep the baffles clear - targets front and center. Private pilot and history buff

05-08-11, 12:59 PM	#4
Sailor Steve Eternal Patrol Join Date: Nov 2002 Location: High in the mountains of Utah Posts: 50,369 Downloads: 745 Uploads: 249	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. __________________ “Never do anything you can't take back.” —Rocky Russo

05-08-11, 01:08 PM	#5
Jimbuna Chief of the Boat Join Date: Feb 2006 Location: 250 metres below the surface Posts: 190,473 Downloads: 63 Uploads: 13	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% __________________ Wise men speak because they have something to say; Fools because they have to say something. Oh my God, not again!!

05-08-11, 08:51 PM	#8
AVGWarhawk Lucky Jack Join Date: Jun 2005 Location: In a 1954 Buick. Posts: 28,253 Downloads: 90 Uploads: 0	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. You get our tags an go home......after 5 hours on line that is. __________________ “You're painfully alive in a drugged and dying culture.” ― Richard Yates, Revolutionary Road

05-08-11, 11:36 PM	#10
magic452 Sea Lord Join Date: Sep 2007 Location: Reno Nevada USA Posts: 1,860 Downloads: 85 Uploads: 0	The Nevada DMV will ask the same question, BUT you gotta show a bill of sale. 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 __________________ Reported lost 11 Feb. 1942 Signature by depthtok33l

05-08-11, 12:31 AM	#2
TorpX Silent Hunter Join Date: Sep 2010 Posts: 3,975 Downloads: 153 Uploads: 11	I don't know what the laws are in IN, but there is no doubt you would be worse off in Illinios. I doubt you can get out of it. My only advise is to be careful who you vote for.

05-08-11, 03:56 PM	#6
vienna Navy Seal Join Date: Jun 2005 Location: Anywhere but the here & now... Posts: 7,711 Downloads: 85 Uploads: 0	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.