Sales Tax?? Out of State Purchase.

[Dr_Zinj]

Massachusetts is bad for purchases in New Hampshire. Especially for big ticket items like cars. Of course they get their residents when it comes time for registration.

 

[Buggs67]

It's a little different in VA now. The VA motor vehicle sales/use tax explicitly nets out manufacturer's rebates and incentives. It's one of the concessions the dealers won in the run-up to increasing the tax from 3 percent to 4.05 percent last July 1.

In NJ you pay on the net price after rebates, trade in, etc. But it's the regular sales tax rate of 7%. If you buy the car out of state or used they collect the tax at registration time. Legally if you traded your current car even for another car when you go to register it they'll want 7% of the Blue Book Value of your trade. Screwed up.

 

[Threepoint]

I think this is why: (from VA state site posted earlier)
"For the purposes of the Motor Vehicle Sales and Use Tax collection, gross sales price includes the dealer processing fee. The gross sales price is the vehicle price after the manufacturers' rebates or manufacturers' incentives. Gross sales price does not include any other price reductions, such as credit for trade-ins, unpaid liens or other unpaid credits."

Yep, that was my example. If Steppenwolfe is still following this, perhaps he'll know.

 

[varmint]

Ah, taxes... almost as much fun as religion. Interestingly, in the 60's I learned that Indiana noted that Chicago boys were coming into Indiana to harvest "ditch weed" which was marijuana growing wild in... the ditches. It had been cultivated for hemp when WWII cut off hemp from the Philippines, and the Navy still needed its rope, so hemp was widely grown. The THC content was so low that smoking it was a waste of time and health, but weed being weed, folks still gathered it. The clever tax men would have troopers hide in trees with binoculars and radios, and when the Chicago boys would have a full trunk load, they'd sweep in and bust them. The whole point was to catch them and charge them the $35 an ounce tax that was assessed on the illegal substance. In the 70's, I worked in a college town stereo shop, and we'd often sell expensive gear to out of state students, who would have us ship the (empty) boxes and packing to their homes. The state would send in tax inspectors, who would set up desks in the center of our offices and pour over all records. If they found a tax exempt sale where the box we shipped didn't weigh the correct amount, we had pay the sales tax and penalties. Needless to say, if tax was due, we collected it!


As for reporting and paying use tax, good luck with that. Unless you have a loan with Kubota or someone who records it, I doubt if anyone will find out you have purchased a used tractor from out of state, and since some of us feel that much tax money is wasted, or worse, we don't worry about every penny. I believe I once read that something like 2% of all due use tax is collected. If that. If you buy a used tractor from a neighbor, do you report the purchase and pay sales tax? Many don't.

 

[Threepoint]

[snip]In the 70's, I worked in a college town stereo shop, and we'd often sell expensive gear to out of state students, who would have us ship the (empty) boxes and packing to their homes. The state would send in tax inspectors, who would set up desks in the center of our offices and pour over all records. If they found a tax exempt sale where the box we shipped didn't weigh the correct amount, we had pay the sales tax and penalties. Needless to say, if tax was due, we collected it!
[snip]

Great story! :thumbsup:

 

[pjssailor]

There is a big difference between Federal Income tax and sales tax enforcement. IRS is a USA federal agency dealing with enforcement of US income tax. Sales tax that is being talked about here is a state tax collected by the the State of New YOrk.

 

[Alan L.]

I don't know if anyone has brought this up, but in Texas the sales tax on a motor vehicle sold by in individual is based on the larger of the actual sale price or 80% of some book amount that the state comes up with. They don't care about the condition, so if you but a truck for $1000 that is worth $1000 due to condition, if the book says you pay motor vehicle tax on $2000 then you will pay the 6.25% tax on that amount. You can pay tax on the appraised value if you pay to get one.

Several years ago I sold a 1995 Ford F150 in good condition for $4500 (wish I had it back). Thy buyer came to my office with the cash and the paperwork for me to sign so he could transfer title. He wanted me to sign a document with as selling price of $2500 "so he could save some sales tax". I didn't sign until the document read $4500, the real price. Why commit fraud to save a couple of hundred $?

 

[Steppenwolfe]

You pay sales tax on the negoitated price BEFORE taking the rebates off. If the price you paid before rebates was the sticker then that is correct. (Not sure why you would pay sticker price)

Rebates are cash back after sale. You can either take them in cash or apply them to the sale. That is why you pay tax on them. Yeah sucks, but better than no rebates.

At least this is how NY handles it. Hard to believe any other state can figure out how to suck any more money out of you than NY.

Yes, you are correct, that is what happened to me. STILL, hard to swallow. We looked at farms upstate NY before we settled on SW Virginia. Beautiful country, affordable properties, BUT couldn't / wouldn't afford the property taxes.

 

[Threepoint]

Yes, you are correct, that is what happened to me. STILL, hard to swallow. We looked at farms upstate NY before we settled on SW Virginia. Beautiful country, affordable properties, BUT couldn't / wouldn't afford the property taxes.

Steppenwolfe, maybe I misunderstood the situation on the truck you just bought. I'd assumed you bought it in Virginia. Did you pay your sales tax to Virginia or New York? If NY, o.k., but if the transaction was in VA, the dealer should not have collected sales tax on the amount of the manufacturer's rebate, and you should look into a refund. :scratchchin: The VA Auto Dealers Association was successful in having manufacturer's rebates and incentives expressly excluded from "gross sales price" when the comprehensive transportation revenue statute was enacted. See my post #59. See also this link, where the VADA notified all of its dealer members of this exclusion back in 2013, the first year the statute applied: Get Ready for Tax Changes on July 1st | Virginia Automobile Dealers Association | Driving Virginia Since 1943

 

[Bird]

I don't know if anyone has brought this up, but in Texas the sales tax on a motor vehicle sold by in individual is based on the larger of the actual sale price or 80% of some book amount that the state comes up with. They don't care about the condition, so if you but a truck for $1000 that is worth $1000 due to condition, if the book says you pay motor vehicle tax on $2000 then you will pay the 6.25% tax on that amount. You can pay tax on the appraised value if you pay to get one.

Several years ago I sold a 1995 Ford F150 in good condition for $4500 (wish I had it back). Thy buyer came to my office with the cash and the paperwork for me to sign so he could transfer title. He wanted me to sign a document with as selling price of $2500 "so he could save some sales tax". I didn't sign until the document read $4500, the real price. Why commit fraud to save a couple of hundred $?

There WAS a time in the past when showing a much smaller selling price than the actual one, or even showing a sale as a gift, to avoid the sales tax was common, but I don't know anyone who would risk it now.

This past year, my wife's youngest brother died with no will and almost no assets, but he did have an old Ford Taurus that ran pretty well. None of the rest of the family wanted it, so they all signed affidavits so our grandson could transfer title to himself and take the car. So he paid nothing for the car but had to pay sales tax on the book value, as you mentioned above. I think it was $700 that he had to pay that 6.25% sales tax on.