So, I bought this little Honda Accord...

[3RRL]

Well, personally I think it's a lousy deal and have to agree with Jim. Just because there are cheaters, go ahead, pass a law that affects everybody instead of directly dealing with the cheaters. That is just like the ridiculous gun laws supposedly put in force to stop the bad guys. Sorry, but this kind of thinking drives me nuts.

 

[Alan L.]

...from my neighbor. It has about 330,000 miles and runs like a top. It's also very nice inside and out, but she thought it had a blown headgasket. I found a pinhole leak in the heater hose and fixed it for her, but alas, she had lost confidence in the car and wanted to get rid of it.

So, I offer her $1500 for it. She is excited and so am I because it's a great little commuter car that gets nearly 30 mpg. It will be much cheaper transportation than my 3/4 ton Dodge Cummins Diesel.

I have all the documents needed to transfer title in Texas. So, yesterday morning I gave my wife $150 and ask her to stop by the tax office. Texas has a 6.5% sales tax on vehicles, so that is about $93.75, right? WRONG!

When my wife went in, they said that 80% of the book value of the car was $2200 and the sales tax would be $137.50. It does not matter that I have proof that I paid $1500 or even that the car is running. The tax is now assessed on the book value rather than the actual cost. I somehow missed the change in the law. I don't like it. They say this will keep people from claiming they paid very little for a car to avoid taxes. I say it will make a lot of people not file for a new title at all. You don't need a title to register or insure a car in Texas.

What do you think? I know the reasoning (or lack of it) that this will make more money for the state. Do you agree, or do you think more people will just avoid the title transfer?

I don't want this to be a political discussion. It's just a "them against us" issue in my opinion that targets honest folks in the middle class who try to do things right. Okay...rant over.

I think that sucks. My Accord needs about 315,000 more miles to catch up with you. I hope it lasts that long.

I have been getting 32-34 mpg on my '06 Accord, mostly highway.

 

[dooleysm]

I've bought and sold several used vehicles in Indiana recently. All I ever did, when I was buying or selling, was fill in the blank on the title for sale price. I was never questioned when I titled the vehicles. None of the titles were notarized. I asked at the license branch and was told that there is no minimum sale price, so you can technically give a vehicle to someone and not pay sales tax.

My dad signed over the title to my first truck to me when I left for college because he didn't want to be responsible for my actions with the truck while I was away at school. I don't remember how this was handled at the license branch at the time though. I could see this as not uncommon occurance that would definitely become out of hand if you were taxed at blue book value for title transfers.

 

[jinman]

Mornin Jim,
Gee I dunno Jim, with a man of your means whats an extra $43.75 in the grand scheme of things ?

Hey Scottie... If you ever want to move to Texas, I think you can get a job as a tax man. Your logic would fit right in at the tax office.

AlanL: I hope you get every bit of that 315,000 and more...well...maybe not. You don't really want to have to work that many more years, do you?

Dooleysm: I think this law just went into effect in October in Texas. If it actually proves to raise the state's revenue, you can bet many other states will jump on the same bandwagon.

3RRL: If this same logic was applied to gun owners, in order to register a gun we'd all have to pay fines and do time in jail because some people have done bad things with guns and... Never mind... I don't want to put that thought into any lawmakers heads.

 

[RedRocker]

Just another way for the government to get in our pocket. Between insurance and taxes a fella could go broke.

 

[George2615]

That's always something I could never figure out. The state collects sales tax on every new vehicle sold. Since sales tax was collected at purchase, why do we have to pay sales tax every time it is resold? That's tax on top of tax. In my state they now charge $50 just for a title transfer whether you decide to put it on the road or not. 30 years ago you could title a vehicle here and gets plates at a reasonable price. Now if you want to pick up a winter rat to drive through our 5 months of winter, the title, plates and insurance costs more than what you pay for the car. Also when filing taxes for Uncle Sam they want you to pay sales tax on every item you purchase out of state. I'm sure everyone pays tax on items bought out of state. I can't wait till retirement so I can pack up and get out of the land of taxes.

 

[milkman]

Ky., as of Mar. '06 was going by the purchase price, I bought a car for 2500 under average retail and there were no questions asked when I told them the purchase price, still cost me $840 sales tax.

 

[Alan L.]

AlanL: I hope you get every bit of that 315,000 and more...well...maybe not. You don't really want to have to work that many more years, do you?

Thats only about 10 years for me. I'll have to be working at least that long to pay for this new house I'm building.

 

[hazmat]

Since sales tax was collected at purchase, why do we have to pay sales tax every time it is resold? That's tax on top of tax.

In MA they charge you sales tax to buy it, excise tax @ $25/$1000 value (which is at the price you paid for the car, but then depreciates) every year you have it registered & sales tax for the next guy who buys it from you at "book value"

The kicker is that I think they use different sources for the value for the excise tax (lower) vs. the "book value" for when you buy a used car. At least they've never lined up in my experience.

 

[Bird]

In MA they charge you sales tax to buy it, excise tax @ $25/$1000 value (which is at the price you paid for the car, but then depreciates) every year you have it registered & sales tax for the next guy who buys it from you at "book value"

The kicker is that I think they use different sources for the value for the excise tax (lower) vs. the "book value" for when you buy a used car. At least they've never lined up in my experience.

There are definitely different sources with widely varying values. Just look at the difference sometime between Kelly Blue Book and NADA Guides values.