M5Guy

It does not matter what I know about you or do not know about you - you paid $6,000 under wholesale for a car and in the eyes of the Dept of Taxation, That makes YOU suspect. Simply PROVE that you paid $5,000 cash for the car and the problem goes away.

BTW, love the fact that this being my first post makes me suspect - suspect about/of what?

rdgdawg

2 points- where does this crap stop? WHO determines fair market value for ANY purchase? Who determines THAT assessment was WRONG?? For cars, does that mean every car purchased at auction is fair game now??? What a f--kin' joke

And if the car was TOTALLED, your insurance guy's gonna cut you a check for _______???? If you paid $5K, let's say it's KBB is $8K, the IRS is now coming after you for $3k CAPITAL GAINS TAX???

I'm just sayin'....

gs4004gs

Of course it matters what you do or don't know about me because you have NO way to judge my integrity. YOU said. "It's people like you" which means you have taken it upon yourself to deem me dishonest, a liar, a cheat, etc.

Again... if the car was in serious disrepair, you feel people should pay or pay tax on what the KBB value is regardless?

I ask... if you buy an $2,000 TV on Craigslist for $500 because it is damaged, it would be ok with you if the government comes after you for tax on $2,000?

With all the smoke you're blowing... I sure hope you've paid every dime of tax for every online purchase you have ever made. You do know that it is REQUIRED that you report online purchases and pay tax on those don't you?

I would call you suspect because you joined the forums and decided to choose a highly controversial topic and practically lambaste the poster (that being me) for your first post?

4TehNguyen

iTrader: (1)

what if you paid $1000 for a wrecked car thats worth $5000? They are gonna charge you tax on $5k?

rdgdawg

+1.... see my post two above

tex2670

Paying cash without a receipt is the best way to get boned, in many respects. Unfortunately, most people are trusting and don't want to bother. Here, you don't get boned by the guy you did trust--you get boned by the tax man.

Look--it's BS, but if they don't do this stuff, everyone's going to deflate the real purchase price of the car to pay lower taxes. Given that your purchase price is less than 50% of the avg book value, it triggers an audit because they think you are underreporting.

tex2670

Back and forth personal attacks are going to get this thread locked down pretty quickly, if that's what you are aiming to do.

crazee201

Let's just say NY mainly NYC is NOTORIOUS for their TAXES and FINES!!! $140 for a parking ticket OMGWTFIGOTPWNED****!!!! =( Sad thing is I'm only a tunnel and 5 mins away from NYC. On the other hand Jersey parking ticket only a measly $45.00. Sorry for going off topic.

J.P.

[QUOTE=gsrthomas;4498258]The state already got their taxes when the original owner purchased the car new.

I hate it when the state gets tax money over and over again when a transfer occurs. One vehicle could be sold 20 times and get taxed each time. The state already is making their share. Fight it![/QUOTE]

This is the root of the problem and everyone over looks it.

We as the system have accepted it, so what can you do about it?

Can only hope that one day the gov decides to live on a budget like everyone else and they quit finding ways to rape us all.

Och

iTrader: (3)

[QUOTE=J.P.;4499366]
Not only this is the root of the problem, it is also causing a major problem for already hurting auto industry. There are a lot of people that would be buying new cars more often if they didn't have to pay sales taxes.

mmarshall

That issue is being at least partially addressed. With the just-passed Stimulus Package, state sales taxes on new cars, along with auto-loan interest, are now Federally-deductible on all new cars sold in America. But, as I see it, that will only affect the new-car market, not the thread issue here, which deals with the tax on a used-car sale, not a new one.

CK6Speed

iTrader: (1)

No, as long as you show the bill of sale, or some sort of proof that you paid $1000. It can be a canceled check, or if a cash deal the Bill of Sale. Anyone who doesn't get some sort of receipt is asking for trouble down the road. Counties and States are cracking down on fraudulent sales, so while the OP may have indeed paid $5000 and is getting caught in the middle, the fact is the States are loosing millions of dollars from buyers and sellers undervaluing the car for tax purposes. How many times have you hear of people asking if they pay you cash, if you can report a lessor value so both you and the buyer can save on tax? It happens all the time, and unfortunately honest people that do get great deals but have no proof of it will get screwed as well. Can't really blame the States for this, you have to blame all those individuals that have or are committing tax fraud.

Anyway, I'm so glad that in my state I don't have to pay tax on used cars bought through private party. Only if bought through a dealer.

RON430

You guys are getting all wound up in something that has been around for a long long time. As far as anyone's integrity, that's an easy one. To the agencies collecting taxes you have none. Generally their opinion is that whatever they catch you doing, there are a hundred transactions that they don't catch. I sold a bimmer in 88 for less than it was worth for a variety of reasons and yep, the State Board of Equalization sent the buyer an additional bill just as here. This isn't brain surgery, they have the blue book and they can easily check what you paid and make a good guess what it is worth. If you don't like it, I suggest you get your state's sales tax laws changed not complain about getting caught.

Everytime real property changes hands it is a taxable event with the tax based on the value of the property. As with speeding, just because they don't catch everyone doesn't mean you deserve a free pass. You don't think that's fair? Well in this country, dying is a taxable event. The fairness in that escapes me. If you are looking for fairness, don't look at tax code. In the grand scheme of things the good thing is that the sales tax people aren't really interested in going to court or putting anyone in jail, they just want the tax and any adders you earn from being "clever". Pay it and move on. In reality unless you have some really interesting documentation, you are scr*wed anyway.

TLe2006

We all should take the bill of sale and a picture of the car to the dmv just to prove we got a good deal.

M5Guy

I went and re-read my post and I will admit there was a word in there that did not belong. I wrote "How many other people under pay their fair share of taxes?" and I should have written "How many people under pay their fair share of taxes?” By using the word "other" I implied that you cheated the government. I did not mean to imply this and I'm sorry for that.

However, I still stand by the fact that it is guys like you that are causing states to now tax based on estimated market value vs. actual sale value. I clearly stated that you say you paid cash and both you and the seller are willing to attest to that, but that is just not proof in the NY State Tax Dept eyes (a notarized receipt with both of your names on it might help however). Your mistake was thinking that the state would just trust you or that by showing how much work you had to put in the car would justify the low price - it just doesn't work that way. In addition, the state of New York is in no position to try and figure out what your car should be worth. So the easiest way around this is to hit everyone up with a tax rate based on what the state thinks the car is worth. I'm not calling this fair; I'm just saying it avoids this whole mess.

Remember, I live in IL, where we pay sales tax on the FULL purchase price of a car in a lease and then again if we purchase the car at the end of the lease. Not fair, just the way it is.

As a matter of fact I do. We self assess here at work and pay tax on all out of state purchases that are not taxed. Get audited and the first thing they go check is your out of state purchases.

Interesting -
I chose to make this thread my first post because I believe you are wasting your time trying to "prove" to the state that your car was in bad shape and therefore what you paid is fair. They don't care, nor should they. They just want proof that you paid $5K (and yes, I still would argue that a notarized bill of sale should do the trick).

HOWEVER, what really got me was mteele's comment about his Dad's company selling their company car to the Mom for $10. That's what pulled me onto this thread/board. That transaction is/was so illegal it is not even funny.