RamshakleZ

I'm about to pull the trigger on an IS... and am debating used or new.

Anyone know how taxes work when purchasing a used car out of state? I live in Texas. I know that if I were to buy a NEW car in, say, California, but I title the car with Texas plates, I'd pay the Texas tax rate. However, what happens if I purchase a used car from an individual in California
and "transfer" over to me here in Texas. What tax rate do I pay - if any taxes at all??

Dabigman

Doesn't matter how you do it, when you register it in Texas they will want proof that you paid CA tax on it or you will be handed a bill for Texas taxes.

1022it

if you buy private party, you will not have to pay sales tax. the original buyer took the plunge on that one for you. the hitch is that you have to go through with getting the original title from the previous owner's finance company, then register the title/car in your state.

it took my bank (they did all of this for me, including registration) about 2 months to get it done. i had a 90 day permit during the title transfer process, so it was actually very painless.

if you buy from a dealer, i believe you will have to pay the sales tax within the actual state the dealer is selling the car from. i could be wrong though.

good luck!

Evitzee

In the past people would buy a car with a very low value sales receipt so they would pay a lower sales tax when they registered the car. TX closed that loophole recently. They have tables of MINIMUM sale values so if that value is higher than what your receipt says you pay the higher tax. This is to close that loophole people were using.

TimboIS

there are other factors so that people don't cheat around paying taxes. The vehicle has to have X number of miles on it to avoid paying the taxes. Last I thought it was 4K-6K miles.

acbrisker

The one thing that I didn't realize in Maryland ... not sure if it's applicable elsewhere or not ... when I bought a used Pathfinder, I had to pay taxes on the blue book value of the car, not what I paid. That kinda sucked ...

CK6Speed

iTrader: (1)

Every state is different so you have to check with your own state tax laws. Here in Hawaii we don't have to pay tax for used cars bought out of state. There is a catch though. We do pay a "Use" tax on used cars only if you bought it from a dealer. In that case, if you bought it from California, the dealer supposed to have charged you California tax. For us, since our General Excise tax is only 4.167%, we can file for a refund of the difference since we over paid. If the tax is less, we pay the difference.

If we buy from a private party we pay ZERO tax The reason why is there is an exemption for causual sales. A private party sale fall under that category. So as you can see from the reposnses here, every state is a little different. I bought my NSX from a private party in California and my previous SC400 from a dealer in California and had it shipped to Hawaii so I went through both of these situations before.

TruPlaya26

iTrader: (4)

Im in Miami, FL and am planning on buying from a private party in Utah so Im guessing no taxes?

ecoastborn

i thought there was a way to transfer the name over when selling privately to avoid taxes, like if you put ot as a "gift" ?

javyLSU

iTrader: (21)

You pay taxes in Texas. Period. You won't be able to register the car otherwise.
You have to get the seller to not only lie, but attest that lie in front of a notary that the vehicle is a donation. Even then, sometimes there are other factors that trigger a minimum applicable sales tax.

Javier

omgitsroy

iTrader: (1)

in cali .. you pay the tax at dmv...

so if it's 35k then it's 35,000*1.0825 ...

btw.. KBB value tax sucks...

TWQ83

Each state is different ..... But a Private Sale is the most complicated .................... most of the loop holes for taxes have been closed in most states ......... There is actually no tax paid to the Private owner! You will pay the Tax when you regiester the vehicle in what ever state you regiester it in. AND, they will either have a Minimum tax to charge usially based on miles or age of the car. to whatever your state sales tax is.......... If you come to the dealership and buy a Used car the Tax is whatever your state sales tax is ....... NOT which state you buy it in, but whichever state you register it in.......... Now if it is a friend of your or such then you can report the sale price at whatever minimum state tax is required to save tax ......... Again the seller must Notorize the sales contract with the approate numbers on it.

That is the easiest way to handle it and this is just for a cash deal ......... if you financining it through your bank .... have them do the tax work and registration for you.

Hope this helps..........

IS250 4 Me

Please elaborate. I was ready to buy a new IS250 in California, only to find out that I had to pay state tax there, and some portion of my taxes in Texas. Call it double taxation. The dealership in California told me that I cannot drive off without paying the taxes there.

dong888

iTrader: (1)

no, whatever taxes you pay in California should be deducted from your TX taxes. You do not have to pay double taxes.

javyLSU

iTrader: (21)

That's not true - car dealers have been selling and shipping cars across state lines for as long as cars have been sold. The burden of registering and paying the associated fees and taxes on a vehicle purchased in a state other than where it's registered lies with the purchaser, not the dealer. All the dealership needs is a simple piece of paper from the purchaser certifying that the owner is indeed registering the car in another state. IF you are truly an out-of-state purchaser AND user (in other words, you can't have an address in Texas and use the vehicle 100% in California) you submit this form that exempts you from paying sales tax on a new vehicle. The only caveat is that you cannot take delivery in the California. So, you'd have to deal with a dealership that would allow you to "test drive" the vehicle until you're out of the state and then let you take delivery. It's most definitely something most dealers don't want to deal with. However, It's much simpler for individual private party sales, though...

Javier