Michigan sales tax question

We have a small used car lot in Michigan. When we sell a CAR to someone in a reciprocal state, we collect our Michigan 6% sales tax or THEIR rate if it's lower; then Michigan credits that money to the other state. If the purchaser lives in a non-reciprocal state - we collect no taxes and they have to handle the Sec'y of State transactions and pay taxes in their home state.

We're on vacation at the moment, so have no idea if MO is a reciprocal state; and am not sure if a trailer follows that same (motor vehicle) procedure. I'm guessing the Michigan RV dealer is correct; although collecting 1/2 the tax will surely be difficult to report at the end of the month (knowing how the sales tax forms are filed: as a retailer, you either paid the full 6%; or you sold out-of-state and collected zero tax) And yes, to add to the confusion, some of the sales tax laws changed this month.

I want to add one more thought to the "is it really cheaper in Michigan when all is said and done?": Not sure when you intended to pick up the RV, but unless you wait until mid-April (at best) - you will be dousing it in a bunch of road salt. Granted, all of us in the north parts drag our RVs downed salty roads and they seem to hold together just fine; but it IS something to consider.

IIRC I believe that my dealer told me that if there is a lien on the RV, that they must collect the tax to assure the lender that all is legal. But "normally" if you buy it out of state you don't pay tax to that state, you pay the fees when you register it in your state. Like stick dog sez.
bumpy

Every state that collects sales tax has a state tax office. Find it on your state's government site, call them rather than email, and ask them your question. Don't do anything until they clarify what is required and if this dealer is acting legitimately. Take no chances or you may wind up paying the sales tax twice or at least one and half times.

We had to purchase a truck while on vacation in Michigan and thats the way we had to do it... Pay half to Michigan then the other half when buying Indiana plates. It was a painless transaction for us.

When we purchased our 5er in Kansas we had to sign paperwork that we were not registering in Kansas and when we went to register in Illinois we paid the state and local sales tax before we could do the title and tags.

Every state is different. If you buy in Indiana you will pay sales tax in Indiana. If the other state has a reciprocal agreement with Indiana, the tax is forwarded. If there is no agreement you will pay twice.

The only way to know is check with the officials in both states.

I'm from Michigan originally, have bought there for licensing in another state, and have bought in other states for licensing in Michigan. The rules are different for each situation. You need to put the two states together to get the right information.

Most recently, when I moved back to the U.S. from China, I bought a new car in Michigan (Detroit area, clearance time, and my port of entry). Because the car was going to Oklahoma, there was no sales tax to pro-rate (Oklahoma collects no sales tax on motor vehicles). Michigan thus collected no sales tax; I left with bill of sale, manufacturer's certificate of origin, a "temporary" Michigan and a 30-day transit tag. The dealer had to get the tag and temporary title from Michigan Secretary of State office before the vehicle could move off the lot; that's Michigan law for new car sales. I had never heard of a "temporary" title before, but had previously been required to obtain title in state of purchase before moving it, 35 years before.

The first car I bought in Michigan, paid sales tax, titled and tagged it. I ended up paying Oklahoma penalties because I drove it too long on Michigan tags before re-titling in Oklahoma, but back then Oklahoma was collecting property tax on motor vehicles. Rules have changed.

But your situation is different. Missouri has sales tax, probably has a sales tax compact with Michigan. Michigan may not treat a TT as a motor vehicle (Oklahoma certainly doesn't).

Start by asking in Missouri (Secretary of State, DMV, State Treasurer, whoever handles it) what you need to do about taxes and title. Take that information to the dealer in Michigan, because he likely knows only Michigan rules. You do the wrong thing in Michigan, it could cost you more in Missouri.

Lantley wrote:
Is $1800.00 savings worth the hassle of picking up trailer in MI.
I imagine it will cost $800.00 or so to drive up and back. Food,fuel hotel.
So you save a $1000.00 to deal with warranty headache.
I'd be putting a lot of pressure on my local dealer to match or come close to the MI deal. I'm not opposed to buying out of state but $1,800.00 savings is in the grey area for me.

You know i have actually been thinking about that very thing today! You are absolutely correct about the warranty headache's. I will most definetely try to get the local dealer to at least come close as it will be costly to go pick it up and especially the headache of the winter weather.

I was just looking around the MI SOS (Secretary of State our MI DMV) web site.

Only because what you have described isn’t what I have done in the past for out of state purchases as a MI resident. From what I read MI may have negotiated reciprocating agreements that may differ from state to state. This http://www.michigan.gov/documents/485_72279_7.pdf looks like the form for MI dealers use to compute and collect taxes for out of state residence purchases. I will admid I didn’t read it completely it does kind of eluded to something a little different for each state.

Like someone else said MI has been changing some of tax laws. Just in the last couple months MI changed the law for a trade in, that trade value is now exempt from sales tax. The dealers have been lobbying hard for that for a while now. Like someone else said you really should call a SOS branch office to make sure you are armed with the correct info.

Sorry not sure how you put a hyper link in this site I tried HTML code and it didn't seem to work??

We bought our 5th wheel in Colorado and didn't pay tax till we registered in our home state of arizona. Never heard of it being done any other way, unless you are a resident of the state you purchase in.

When I went to buy my fifth in Indiana, I found out that Indiana and NC ARE NOT reciprocal states. Pay tax in Indiana and then again in NC.

However, the Indiana dealer drove it over to Illinois, about 6 miles awasy, and I took delivery there, avoiding the Indiana tax.

One needs to check their state laws to determine if and where taxes are paid.