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.

JALLEN4, if you bring an out of state title, or an in state title to any DMV here, you are going to pay tax on the amount filled in on the title, NOT the amount on the bill of sale. If there is NO amount on the title, OR a ridiculously low price, then they will consult the NADA and charge sales tax on the "average retail". IIRC, Florida is exactly the same way for private transactions, including purchase out of state.

CHBurris wrote:

The Texan wrote:
That is fraud on the dealers part, probably to satisfy "his" floorplan. I would call him and tell him that unless you receive a sales contract with the TRUE sale price, or a check made out to your state for the taxable amount on the $50K, you will file a complaint with his Attorney General and the CO DMV for fraud. His business license is worth more than the dollar amount of fraud he committed, so keep the pressure on him. I hate sleaze ball dealers that try this type of BS....

In our state the DMV requires sales tax be paid on the amount filled in on the title, so if KS is the same, yes you are going to pay on MSRP.

We will most definitely fight it if this is the case.

Do you in fact have a Colorado Title? In most cases, where you pay cash on an out of state delivery, the dealer will give you a "buyers order" and an MSO(Manufacturers Statement of Origin). These two items, when taken to your home state DMV, are used to determine taxes owed and a title in the state of residency is issued. A title and MSO are similar in appearance.

The Texan is assumming fraud when there would be no reason for the dealer to list a higher sales price than actual and several disadvantages for them to do so.

CHBurris wrote:

The Texan wrote:
That is fraud on the dealers part, probably to satisfy "his" floorplan. I would call him and tell him that unless you receive a sales contract with the TRUE sale price, or a check made out to your state for the taxable amount on the $50K, you will file a complaint with his Attorney General and the CO DMV for fraud. His business license is worth more than the dollar amount of fraud he committed, so keep the pressure on him. I hate sleaze ball dealers that try this type of BS....

In our state the DMV requires sales tax be paid on the amount filled in on the title, so if KS is the same, yes you are going to pay on MSRP.

We will most definitely fight it if this is the case.

There is no reason, advantage, or attempted fraud for the dealer to list the MSRP on the title. The dealer should have given you a "buyers order" that would have detailed the transaction and the actual sales price. The "Texan" is assuming something that is just not true.

Do you in fact have a Colorado title? In most states, if you pay cash and wish to title out of state, they are going to give you the MSO(manufacturers statement of origin). The MSO and "buyers order" is then presented to your state of residency where you pay taxes and a Kansas Title(in this case) is issued. An MSO can look like a title but is not.

riven1950 wrote:

Not sure what part of nc you are in, but we live in the county and not any city limits. The $8000 difference would mean about $40/year for us. Definitely wouldn't be worth it for us to argue over. Like I said, they overvalued my little yaris by a few thousand, but yet undervalued my wife's explorer this year by about 8 thousand. All in all for both cars and including tag fees (we opted for special tags on both of them this year) we paid about $250-275. Life is good. Motorhome is coming up. I'm expecting about $400 on it.

I did not appeal the value because I could not pay it or because appealing the value was worth my time. I appealed because State Law says you pay based on sales price. My sales price was 7750 less than the valuation!

Here is what NC General Statue 105-330.2 ( b) says:

" Value. - An assessor must appraise a classified motor vehicle at its true value in money as prescribed by G.S. 105-283. The sales price of a classified motor vehicle purchased from a dealer, including all accessories attached to the vehicle when it is delivered to the purchaser, is considered the true value of the vehicle, and the assessor must appraise the vehicle at this value. "

I agree they overvalue / undervalue USED vehicles all the time. My TT is valued at about 1/3 of its true value, but that is not my point.

If they clip me for 40.00 ( my actual amount was more ) on a NEW truck and everyone else who buys a NEW vehicle for 40.00 it adds up. It is not the money it is the principle of the Gov't taking my 40.00 when they should not.

Reminds me of an article in the paper this week in reference to a referendum on increasing local sales by 1/4 of a cent. The pushers of the tax said it only will cost .25 more on a 100.00 purchase. True but then the Gov't has my .25 cents and I don't. Multiple that times the number of 100.00 purchases made in a year...big money! That is how we got to a 6.75% sales tax rate, a little at a time. ( 6.75 out of every 100.00 is a big chunk of change ). I guess you would vote for the referendum because it is only .25 and not worth arguing over.

I understand your point, but if they undervalued your truck by that amount, you wouldn't of been fighting it. You won on the TT, you lose on the truck. And no I wouldn't waste my sole energy by myself. On a .25 increase. Depends on how much you are spending. And you don't pay that high of a rate on food. State sales tax is actually 4.75% local municipalities are what drive those rates up to 6.75 and even up higher to over 8% in some areas. But if you live in places that are continuously improving and adding things, then you can expect some higher rates. I would much rather have people that visit the area or that live outside he area that come and buy stuff to help pay for it through sales tax. You are probably getting hit enough on property tax as it is. Reminds me of 10 years ago when we moved to Charlotte and they were building the bobcats arena. Homeowners in the Charlotte-mecklenburg area paid for it with an increase in their property tax. Kind of sucks. They've even talked a couple times about trying to impose a tax on those of us that work in Charlotte but live outside of it through our payroll. If it ever happens, then I will have to get out the calculator and decide where it will be more worthwhile in living.

I do understand joining in with others and trying to get the votes to a no on the other thing you mentioned. In money that we spend every month that includes a normal sales tax at he .25 increase you mentioned, I bet it would not cost us more than a few bucks a month. And that is spending $800 or more per month on tangible goods, which we don't do. Besides mortgage, car note, and other bills (which don't have a sales tax added monthly) there's not a whole bunch more to spend on. Heck if you are spending $100,000 a year, that's only $250 more (less than $25/month).

I know it's principle.

Not sure what part of nc you are in, but we live in the county and not any city limits. The $8000 difference would mean about $40/year for us. Definitely wouldn't be worth it for us to argue over. Like I said, they overvalued my little yaris by a few thousand, but yet undervalued my wife's explorer this year by about 8 thousand. All in all for both cars and including tag fees (we opted for special tags on both of them this year) we paid about $250-275. Life is good. Motorhome is coming up. I'm expecting about $400 on it.

I did not appeal the value because I could not pay it or because appealing the value was worth my time. I appealed because State Law says you pay based on sales price. My sales price was 7750 less than the valuation!

Here is what NC General Statue 105-330.2 ( b) says:

" Value. - An assessor must appraise a classified motor vehicle at its true value in money as prescribed by G.S. 105-283. The sales price of a classified motor vehicle purchased from a dealer, including all accessories attached to the vehicle when it is delivered to the purchaser, is considered the true value of the vehicle, and the assessor must appraise the vehicle at this value. "

I agree they overvalue / undervalue USED vehicles all the time. My TT is valued at about 1/3 of its true value, but that is not my point.

If they clip me for 40.00 ( my actual amount was more ) on a NEW truck and everyone else who buys a NEW vehicle for 40.00 it adds up. It is not the money it is the principle of the Gov't taking my 40.00 when they should not.

Reminds me of an article in the paper this week in reference to a referendum on increasing local sales by 1/4 of a cent. The pushers of the tax said it only will cost .25 more on a 100.00 purchase. True but then the Gov't has my .25 cents and I don't. Multiple that times the number of 100.00 purchases made in a year...big money! That is how we got to a 6.75% sales tax rate, a little at a time. ( 6.75 out of every 100.00 is a big chunk of change ). I guess you would vote for the referendum because it is only .25 and not worth arguing over.

wa8yxm wrote:
Well,,,, If you buy "in state" you normally pay taxes at time of sale, they will be a line item (Next to last such item) on the sales receipt. It will say either Sales Tax. or just Tax.. Using your calculator figure it out, You do know your state's sales tax rate right.. Mine is six percent so on a 100,000 purchase I'd pay 6,000 in sales tax So divide (Tax*100/SubTotal = Percentage tax paid)

If you bought out of state you pay your DMV USE (not sales) tax based on the sales receipt as well. But if the receipt they sent you is bigger than what you paid.. You have a problem and need to fix it.

I'm jealous. Our sales tax is 8.65.

I panicked last night when I looked at the title, but it does make sense that we would just pay sales tax on the purchase price. I've never really given it a lot of thought with other vehicles, campers, etc. that we have bought, because I've never seen such a difference between MSRP and what we actually paid.
I'm anxious to call on Monday and see what property tax will be. So tired of paying an ungodly amount of money for property taxes. Ugh.

CHBurris wrote:
Sorry I didn't specify, but we bought a Fuzion 404 toy hauler, not a Ford Fusion. The MSRP is completely ridiculous, but they explained to my husband that they put that price on there for people who are borrowing money and can only borrow a certain percentage. Something like that, anyway. Ha. Makes no sense to me.

Let's say the msrp is $100,000. If they sell it to you for $75,000 and you are financing it. They can say you are paying $100,000 and putting $25,000 down. Looks good to the bank when you are going to borrow. Same as they do on cars. Car is $25,000 but you are getting a $5000 rebate which goes back towards the car. So you look like your getting a $25,000 car and you put $5000 down on it.

The reason we have the title is because we didn't take out a loan on it, but didnt pay sales tax where we bought it because we live in a different state.

Now that could cause some issue. Both states may be looking for that tax money. Usually one will offset he other. May not be a problem for you, but then it could.

Well,,,, If you buy "in state" you normally pay taxes at time of sale, they will be a line item (Next to last such item) on the sales receipt. It will say either Sales Tax. or just Tax.. Using your calculator figure it out, You do know your state's sales tax rate right.. Mine is six percent so on a 100,000 purchase I'd pay 6,000 in sales tax So divide (Tax*100/SubTotal = Percentage tax paid)

If you bought out of state you pay your DMV USE (not sales) tax based on the sales receipt as well. But if the receipt they sent you is bigger than what you paid.. You have a problem and need to fix it.

The Texan wrote:
That is fraud on the dealers part, probably to satisfy "his" floorplan. I would call him and tell him that unless you receive a sales contract with the TRUE sale price, or a check made out to your state for the taxable amount on the $50K, you will file a complaint with his Attorney General and the CO DMV for fraud. His business license is worth more than the dollar amount of fraud he committed, so keep the pressure on him. I hate sleaze ball dealers that try this type of BS....

In our state the DMV requires sales tax be paid on the amount filled in on the title, so if KS is the same, yes you are going to pay on MSRP.

We will most definitely fight it if this is the case.