I got pwnd.
October 13, 2009 5:24 PM Subscribe
When I bought my car from out of state, the dealer never collected sales tax. Now I moved to that state and the state wants to collect! Help!
In August 2008, I purchased a car from a dealer in MA. I was a NH resident at the time. I was under the impression that, being a NH resident, I was not obligated to pay MA sales tax (we don't have sales tax in NH). I picked up the car at the dealership and drove it home.
Fast forward to last week. I recently moved to MA and went to the RMV to get my MA plates. Prior to my visit, I had asked the dealer for a letter saying I was from out of state when I purchased my car, and that I was exempt from paying sales tax. The dealer sent me a notarized Letter of Delivery. I handed in all the forms, and the clerk at the RMV stated that the exemption form needed the salesman's home address, since he delivered the car. I (stupidly?) told her that I picked up the car at the dealership, and that it wasn't delivered to my house. The clerk went and talked to at least one supervisor, as well as someone from the Department of Revenue. They all confirmed that, since I picked the car up in MA, I owed sales tax. (If I had let the dealership deliver the car to me, I would not owe sales tax.) She also confirmed that the dealer should have collected sales tax when I purchased the car. She gave me a printout showing the sales tax that I owe (about $1600) and also the penalty (another $500 or so) for not paying the sales tax when I purchased it.
I called the Finance Manager at the dealership and was basically like "WTF?" She told me I should try and go to another clerk at the RMV, or to another RMV office, and not tell them that I picked the car up in MA. (Apparently the dealer was basically pretending that they delivered the car so that I wouldn't have sales tax. Except they didn't let me in on this little secret. Fun.) I told her that that wouldn't work, as the RMV had documented my case and the clerk had also mentioned that it was possible tax evasion by the dealer. The finance manager basically said "Oh, that isn't good. Well, good luck with all that." and left it at that.
I realize I owe the sales tax to the state and there's nothing that can get me out of that. Of course, if I had known I'd be out $1600 for picking the car up at the dealer, I would have had them deliver it. But since the dealer never told me about the fact that picking it up would force me to owe sales tax, and because they never collected it, I'm now out $2100.
What can/should I do? I realize I can probably call the BBB and Consumer Protection, but is there anything I can do that will help offset the money I owe? I realize YANML, but should I consult with one? Should I just suck it up and pay the $2100 and move on with my life?
Here are some links to save you some time digging for them:
Converting an Out-of-State Registration
Form MVU_29, Affidavit in Support of a claim for Exemption from Sales Use Tax for a Motor Vehicle Purchased Outside of Massachusetts
In August 2008, I purchased a car from a dealer in MA. I was a NH resident at the time. I was under the impression that, being a NH resident, I was not obligated to pay MA sales tax (we don't have sales tax in NH). I picked up the car at the dealership and drove it home.
Fast forward to last week. I recently moved to MA and went to the RMV to get my MA plates. Prior to my visit, I had asked the dealer for a letter saying I was from out of state when I purchased my car, and that I was exempt from paying sales tax. The dealer sent me a notarized Letter of Delivery. I handed in all the forms, and the clerk at the RMV stated that the exemption form needed the salesman's home address, since he delivered the car. I (stupidly?) told her that I picked up the car at the dealership, and that it wasn't delivered to my house. The clerk went and talked to at least one supervisor, as well as someone from the Department of Revenue. They all confirmed that, since I picked the car up in MA, I owed sales tax. (If I had let the dealership deliver the car to me, I would not owe sales tax.) She also confirmed that the dealer should have collected sales tax when I purchased the car. She gave me a printout showing the sales tax that I owe (about $1600) and also the penalty (another $500 or so) for not paying the sales tax when I purchased it.
I called the Finance Manager at the dealership and was basically like "WTF?" She told me I should try and go to another clerk at the RMV, or to another RMV office, and not tell them that I picked the car up in MA. (Apparently the dealer was basically pretending that they delivered the car so that I wouldn't have sales tax. Except they didn't let me in on this little secret. Fun.) I told her that that wouldn't work, as the RMV had documented my case and the clerk had also mentioned that it was possible tax evasion by the dealer. The finance manager basically said "Oh, that isn't good. Well, good luck with all that." and left it at that.
I realize I owe the sales tax to the state and there's nothing that can get me out of that. Of course, if I had known I'd be out $1600 for picking the car up at the dealer, I would have had them deliver it. But since the dealer never told me about the fact that picking it up would force me to owe sales tax, and because they never collected it, I'm now out $2100.
What can/should I do? I realize I can probably call the BBB and Consumer Protection, but is there anything I can do that will help offset the money I owe? I realize YANML, but should I consult with one? Should I just suck it up and pay the $2100 and move on with my life?
Here are some links to save you some time digging for them:
Converting an Out-of-State Registration
Form MVU_29, Affidavit in Support of a claim for Exemption from Sales Use Tax for a Motor Vehicle Purchased Outside of Massachusetts
Ummmm.... so why exactly do you think you don't owe sales tax to MA for buying a car in MA again?
You may want to read the entire question before jumping in and snarking.
"I realize I owe the sales tax to the state and there's nothing that can get me out of that." Fifth paragraph.
OP, you should try making those calls, but if all else fails, try asking for a payment plan. It sounds like an unfortunate misunderstanding, but often agencies can try to help spread the weight around a little more evenly.
posted by cmgonzalez at 6:17 PM on October 13, 2009
You may want to read the entire question before jumping in and snarking.
"I realize I owe the sales tax to the state and there's nothing that can get me out of that." Fifth paragraph.
OP, you should try making those calls, but if all else fails, try asking for a payment plan. It sounds like an unfortunate misunderstanding, but often agencies can try to help spread the weight around a little more evenly.
posted by cmgonzalez at 6:17 PM on October 13, 2009
Response by poster: To clarify, if I'd had the car delivered to my house in NH, I would not have to pay sales tax.
posted by Tu13es at 6:22 PM on October 13, 2009
posted by Tu13es at 6:22 PM on October 13, 2009
I've lived in Mass my whole life, so I've never experienced this personally, but I was under the impression that even if you had purchased you car in NH while you were living there, that if you moved into MA at some later date they'd still collect the sales tax from you when you went to register your car.
posted by inthe80s at 6:32 PM on October 13, 2009
posted by inthe80s at 6:32 PM on October 13, 2009
Yeah I don't know about MA either, but I bought my car in MA when I was living in NH completely sales-tax free, because I lived in NH, and when I moved to Vermont a couple years later they made me pay sales tax on it. Are you sure you're right that delivery wouldn't have made you pay tax? Because I did some cursory research on it at the time, and my recollection was that if you didn't pay tax the first time you registered the car, they could make you pay it when you moved to a new state.
posted by brainmouse at 6:47 PM on October 13, 2009
posted by brainmouse at 6:47 PM on October 13, 2009
Response by poster: Yeah, the clerk at the RMV did tell me directly that if I had just let them drive it to my house in NH, I wouldn't owe sales tax, but because I went and picked it up, I do. :(
posted by Tu13es at 7:01 PM on October 13, 2009
posted by Tu13es at 7:01 PM on October 13, 2009
Welcome to Taxachusetts. The only way to avoid MA sales tax is to buy things in NH, or other tax free states. You may have a case if you persist that the car was purchased for use in NH, and the MA "sales" tax is actually a "use" tax. You may be able to bargain for a lower tax based on the usage in NH. I wouldn't count on either. You may be able to cause some commotion, and have a little fun by bringing your problem to the press. The absurd idea of MA taxing NH residents is kinda hot right now.
posted by Gungho at 5:57 AM on October 14, 2009
posted by Gungho at 5:57 AM on October 14, 2009
I bought a car from my dad for $1000 in MA, moved to Seattle, and had to pay Washington state sales tax when I registered it over 2 years later - go figure.
posted by tristeza at 8:46 AM on October 14, 2009
posted by tristeza at 8:46 AM on October 14, 2009
I know the clerk told you that, but have you checked with a third party? I suspect the clerk is wrong.
posted by brainmouse at 8:46 AM on October 14, 2009
posted by brainmouse at 8:46 AM on October 14, 2009
brainmouse: I suspect the clerk is wrong.
If you had read the link from the OP, Converting an Out-of-State Registration, you would see this official statement by the RMV:
"You are not exempt from Massachusetts sales tax if your vehicle was purchased and delivered in Massachusetts and the original sales tax was never paid."
posted by JackFlash at 9:33 AM on October 14, 2009
If you had read the link from the OP, Converting an Out-of-State Registration, you would see this official statement by the RMV:
"You are not exempt from Massachusetts sales tax if your vehicle was purchased and delivered in Massachusetts and the original sales tax was never paid."
posted by JackFlash at 9:33 AM on October 14, 2009
This thread is closed to new comments.
posted by phoenixy at 6:07 PM on October 13, 2009