I have to pay sales taxes on how much?
August 9, 2011 2:05 PM Subscribe
Is there a way to pay sales taxes only on the $$ amount paid for a used vehicle in Texas?
Last week I bought a used truck. After looking long enough, keeping a close eye on craiglist for a couple of months, I knew what to pay for what I wanted, so I waited it out, and really bought this truck right -- a great deal on a really sweet truck.
When I registered it, I was appalled to find that I was charged sales tax on an amount WAY above the price I paid for it -- the woman at DPS told me too many people were lying about what they paid for used vehicles, thus less in sales tax to the state, so now Texas charges taxes on $XXXX.XX amount, dependent upon their estimated worth of the vehicle.
But -- I didn't lie, I did buy the truck right. Did I miss something here, could I have perhaps showed up with a notarized bill of sale, or a note from my mother, whatever? And what if someone really does give their car to someone else, or sell it for a song, as a kindness, maybe to their child, or someone in financial trouble -- is there in Texas a mechanism for not getting hosed with sales taxes for a gift?
tl;dr -- Is there in Texas a mechanism for not getting hosed with sales taxes IE not being charged sales taxes on a price higher than what is actually paid for the vehicle?
Last week I bought a used truck. After looking long enough, keeping a close eye on craiglist for a couple of months, I knew what to pay for what I wanted, so I waited it out, and really bought this truck right -- a great deal on a really sweet truck.
When I registered it, I was appalled to find that I was charged sales tax on an amount WAY above the price I paid for it -- the woman at DPS told me too many people were lying about what they paid for used vehicles, thus less in sales tax to the state, so now Texas charges taxes on $XXXX.XX amount, dependent upon their estimated worth of the vehicle.
But -- I didn't lie, I did buy the truck right. Did I miss something here, could I have perhaps showed up with a notarized bill of sale, or a note from my mother, whatever? And what if someone really does give their car to someone else, or sell it for a song, as a kindness, maybe to their child, or someone in financial trouble -- is there in Texas a mechanism for not getting hosed with sales taxes for a gift?
tl;dr -- Is there in Texas a mechanism for not getting hosed with sales taxes IE not being charged sales taxes on a price higher than what is actually paid for the vehicle?
You can only reduce the tax liability for gifts if the gift is from a parent, stepparent, grandparent, child, stepchild, grandchild, sibling, guardian, or a decedent's estate. Or if one of the parties is a 501(c)(3) charity.
posted by grouse at 2:15 PM on August 9, 2011
posted by grouse at 2:15 PM on August 9, 2011
Look up the value of the truck in the Blue Book.
If the value is lower, write a letter to DMV stating you were charged sales tax on $XXXX.XX when your car is actually worth $YYYY.YY.
DMV's rarely, if ever, use the sale price of a used car to determine the tax.
posted by tckma at 2:59 PM on August 9, 2011
If the value is lower, write a letter to DMV stating you were charged sales tax on $XXXX.XX when your car is actually worth $YYYY.YY.
DMV's rarely, if ever, use the sale price of a used car to determine the tax.
posted by tckma at 2:59 PM on August 9, 2011
Response by poster: Six minutes from the time I posted to the time I got the answer -- pretty sweet. It took that long to write the question, likely.
Check out the following, anyone interested in how it bolts together, from the link from Horselover Phattie:
If you paid less than the standard presumptive value for your vehicle, you may pay sales taxes on an appraisal amount provided it is certified by a licensed insurance adjuster or a licensed motor vehicle dealer; and obtained within 20 working days of the date of purchase.
The link in that sentence goes to a .pdf form; it would have cost me between $100 and $300 to get said appraisal, and I'd have to have the appraisal in my hand when I went in to register the vehicle.
And on the .pdf form it is clear that the dealer is to base the appraisal upon the *retail* price, which is what I am assuming is the price we'd see on the windshield of one of those horses-ass "We Tote The Note" scuzz-ball car dealers on South Lamar, and not anywhere near to what I paid, due to my willingness to shop carefully. Annoying.
posted by dancestoblue at 3:12 PM on August 9, 2011
Check out the following, anyone interested in how it bolts together, from the link from Horselover Phattie:
If you paid less than the standard presumptive value for your vehicle, you may pay sales taxes on an appraisal amount provided it is certified by a licensed insurance adjuster or a licensed motor vehicle dealer; and obtained within 20 working days of the date of purchase.
The link in that sentence goes to a .pdf form; it would have cost me between $100 and $300 to get said appraisal, and I'd have to have the appraisal in my hand when I went in to register the vehicle.
And on the .pdf form it is clear that the dealer is to base the appraisal upon the *retail* price, which is what I am assuming is the price we'd see on the windshield of one of those horses-ass "We Tote The Note" scuzz-ball car dealers on South Lamar, and not anywhere near to what I paid, due to my willingness to shop carefully. Annoying.
posted by dancestoblue at 3:12 PM on August 9, 2011
Response by poster: tckma: "Look up the value of the truck in the Blue Book."
I just looked up this pickup in the blue book link. And if there is any comfort to be had it's that I paid just a bit less than 1/2 of the blue book price for the vehicle, which I would have guessed in any case; I was well aware that I'd bought the truck right.
posted by dancestoblue at 3:17 PM on August 9, 2011
I just looked up this pickup in the blue book link. And if there is any comfort to be had it's that I paid just a bit less than 1/2 of the blue book price for the vehicle, which I would have guessed in any case; I was well aware that I'd bought the truck right.
posted by dancestoblue at 3:17 PM on August 9, 2011
This thread is closed to new comments.
There is an exception for giving a vehicle to an immediate family member. Both parties must sign a notarized document stating their relationship and that the car was a gift, and then there's a $10 gift tax.
posted by donajo at 2:14 PM on August 9, 2011 [1 favorite]