Pay tax on MSRP or actual sale price?

ol Bombero-JC wrote:

Golden_HVAC wrote:


In California.....

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.

CA - tax is based on what you paid, *not* MSRP.

However, as others posted - for used vehicles the DMV will check what you paid -vs- the Blue Book value.
Tax will *not* be based on an amount *less* than that - even if you really got a great deal on a used vehicle for whatever reason.


The last sentence is the "5 paragraph" solution:
Call the DMV in the state where you reside, and ask..:W

Way better source than posters on an Internet forum.

~

Not necessarily true. The DMV in California may and probably will question it if the difference is significant. However if you have a reasonable explanation then the taxes may be calculated according to the actual sales price that is reported. One of the more common "reasonable" explanations that people use is that the vehicle was in need of major repairs at the time of purchase. Not too uncommon in private transactions that the actual sales price is under reported. What really gets some people in trouble is when the seller leaves the sales price blank on buyers paperwork and the buyer fills in a lesser amount or seller actually fills in a lesser amount and the seller files the required Notice of Transfer and Release of Liability form and on it reports the true price paid.

I agree that the only way to know how your state handles the situation as posted by the OP is to ask them. Each state handles vehicle transactions differently.