Pay tax on MSRP or actual sale price?

wbwood wrote:
No. You pay on the sale price. But because the title listed it at a higher price doesn't meant the state or county is going to tax you at that rate. They will deem a value on it and tax you from that. Could be close to the msrp, depends on what they deem it at. But shouldn't have anything to do with the title.

I would say that you "Should" pay the tax based on the sales price. However you never know what the local state or county government will base it on.

I have to agree that the "MSRP" is inflated, and rarely does anyone walk into a car dealership anymore and say "Well if Ford or Honda says it should sell for $35,650, I will not pay a penny less for that vehicle". Most know to ask for a discount, even governments buy cars for their fleets at a huge discount from the MSRP that the same vehicle might sell to the public for.

In California, if you buy a cell phone and the "Sale Price before rebate" is say $300 and you have a $299 rebate for staying with the cell phone company for 24 months at a inflated monthly rate, then you must pay the sales tax based on the inflated "Sale Price" of the product. You also pay a tax on the inflated contract price, and more tax for the 911 system, even a $8 tax on the freeway call boxes too.

Everyone knows that the cell phone company is not giving away the phone for $1, they are actually charging you $45 a month in cell phone charges when $15 a month is more than enough to cover your actual cost for them to run your phone a month. The extra $30 is going to help pay for that phone (that they buy 1,000 at a time for about $45 each) and to go to pure profits of the cell phone company.

So what I am taking 5 paragraphs to say is that some states might tax you based on the recommended sales price, not what you actually paid for it. You will have to check with your local state.

Good luck!

Fred.