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Buying a used car? Prepare for the tax bill [TEXAS]
STAR-TELEGRAM ^ | Sep. 26, 2006 | ANTHONY SPANGLER

Posted on 09/26/2006 6:30:36 AM PDT by Dubya

Used-car buyers beware -- of your sales tax bill.

Starting Sunday, tax offices across Texas will use a new system to determine sales taxes on private used-car purchases, which could set the value at more than someone actually pays for the vehicle.

Tarrant County is considering placing deputies or constables at tax offices when the new law takes effect.

"It's going to be a little bit of a shock to some people," said Betsy Price, Tarrant County tax assessor-collector. "We might have to charge them a lot more if the vehicle is valued higher."

Called "standard presumptive value," tax assessor-collectors will use a Texas Department of Transportation guide to determine a vehicle's value, regardless of how much a person pays for the car. The law would not apply to vehicles purchased through licensed dealers.

Buyers should expect to pay tax on at least 80 percent of the state-determined value, even if they paid less than that for the vehicle. State sales tax on used cars is 6.25 percent.

Mary Nell Mathis, tax advisor to consumer advocacy group Common Cause Texas, said the new guidelines could be fair.

"A $500 difference in the price of the car would only be $31.25 difference in sales tax," she said. "For most people, that's hardly worth arguing over. Some people will win and some people will lose."

TAX-STICKER SHOCK

New state guidelines meant to prevent fraud in used-car sales among private parties could mean higher sales taxes for used-car buyers.

Buyers will pay taxes based on a state assessment of the value, even if they paid less for the vehicle.

The law applies only to private transactions; it will not affect sales that go through licensed dealers.

A buyer can appeal the state's value of the car within 20 working days of purchase by getting a licensed car dealer or insurance adjuster to appraise the vehicle and fill out state forms, a process that could cost as much as $300.

The measure was among several bills passed by the Texas Legislature to generate money for school financing.


TOPICS: Business/Economy; Constitution/Conservatism; Crime/Corruption; Culture/Society; Foreign Affairs; Government; Miscellaneous; News/Current Events; US: Texas
KEYWORDS: friedman06; govwatch; texas; usedcartax; vehicletax
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The measure was among several bills passed by the Texas Legislature to generate money for school financing.

And Gov Perry.

1 posted on 09/26/2006 6:30:37 AM PDT by Dubya
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To: Dubya

It's for the kids.


2 posted on 09/26/2006 6:33:55 AM PDT by ecomcon
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To: Dubya
to generate money for school financing.

Well...it does take a lot of money to educate Mexico's children.
3 posted on 09/26/2006 6:35:35 AM PDT by P-40 (Al Qaeda was working in Iraq. They were just undocumented.)
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To: Dubya

Already done here in the People's Republik.

Sucks too, you can't write a receipt for $1 because they will check the blue book and then tax accordingly.

I'm sick of taxes.

SZ


4 posted on 09/26/2006 6:37:47 AM PDT by SZonian (Fighting Caliphobia one detractor at a time)
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To: Dubya

Most of these vehicles have already been taxed in Texas once on the original purchase, now the greedy tax collectors,not only are taxing a car at least twice, but want to make their own apprasial of the car.


5 posted on 09/26/2006 6:38:19 AM PDT by cheme
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To: Dubya

So someone buying a car cheap because it needs work is going to get taxed as if it's in good working order. Nice.


6 posted on 09/26/2006 6:39:59 AM PDT by tacticalogic ("Oh bother!" said Pooh, as he chambered his last round.)
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To: Dubya

Kansas tried that. I think sales tax is on the sale price; period, if they raise property taxes/tag rates that is a whole different beast.
I haven't bought a vehical since the laws were bantered so am not sure how it is now.


7 posted on 09/26/2006 6:40:52 AM PDT by Dust in the Wind (I've got peace like a river)
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To: Dubya
Seems not government is taxing the perceived value not the actual value
8 posted on 09/26/2006 6:42:22 AM PDT by edcoil (Reality doesn't say much - doesn't need too)
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To: Dubya
And Texas is supposed to be a Republican State???? (sigh)

And we like to call Massachusetts , Taxachusetts or make fun of California because of some of their tax scams.

We'll soon be called the Great State of Taxes if this continues.
9 posted on 09/26/2006 6:43:45 AM PDT by The South Texan (The Democrat Party and the leftist (ABCCBSNBCCNN NYLATIMES)media are a criminal enterprise!)
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To: Dubya

The government is an organized crime syndicate specializing in extortion.


10 posted on 09/26/2006 6:44:18 AM PDT by monday
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To: The South Texan

I'd certainly trade your tax regimen cheerfully for California's, where you hit the maximum 9.3% tax bracket on all income over (I think it was) $40k or so.

How do they handle the fact that the value of cars depends dramatically on mechanical condition? This might make cars in poor condition entirely unsellable in Texas.

I guess the car dealer lobby has been hard at work.

D


11 posted on 09/26/2006 6:47:05 AM PDT by daviddennis
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To: Dubya; SouthTexas; WestCoastGal

Guess the car dealerships are going to be very busy on Saturday.


12 posted on 09/26/2006 6:47:38 AM PDT by steveegg (Let's make the deeply-saddened Head KOmmie deeply soddened in Nov. - deny the 'RATs the election)
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To: Dubya

So next time I go to a garage sale or flea market can I expect a tax bill from the state on the "assumed value" of the used items, etc. that I purchase? Sounds like a greasy slide toward a pile of ....


13 posted on 09/26/2006 6:47:39 AM PDT by IllumiNaughtyByNature (Samsonite! I was WAAAYYY off!)
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To: tacticalogic

A little something to help the new and used car dealers associations (one of the biggest guilds contributing to state and local government).


14 posted on 09/26/2006 6:48:32 AM PDT by pierrem15 (Charles Martel: past and future of France)
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To: monday
The government is an organized crime syndicate specializing in extortion.

Quote of the day. Mind if I borrow that for a tagline after the election?

15 posted on 09/26/2006 6:48:34 AM PDT by steveegg (Let's make the deeply-saddened Head KOmmie deeply soddened in Nov. - deny the 'RATs the election)
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To: Dubya

Would this apply if the vehicle was purchased out of state?


16 posted on 09/26/2006 6:48:36 AM PDT by joebuck
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To: SZonian

The blue book is WAY HIGH on the actual value of most cars. In luxury cars, it is up to 5000 high! Bend over, and grab your ankles!!


17 posted on 09/26/2006 6:49:35 AM PDT by stephenjohnbanker (Our troops will send all of the worlds terrorists to hell in a handbasket with no virgins!)
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To: Dubya
I don't buy cars all that often.....so I was surprised when I was gifted a 77 Nova in California, registered it in Washington and was told I had to prove that at some point, somewhere - anywhere - a tax was paid on it.

If I couldn't prove that a tax was paid on it at some point since its manufacture and subsequent transfers and sales....I had to pay Washington State sales tax on it.

Seriously.  It's ridiculous.

 

18 posted on 09/26/2006 6:49:39 AM PDT by Psycho_Bunny
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To: daviddennis
How do they handle the fact that the value of cars depends dramatically on mechanical condition? This might make cars in poor condition entirely unsellable in Texas.

It will definitely send some cars that would otherwise be salvagable to the scrap yards. You can't afford to buy the car needing work, pay the sales taxes on it as if the work is already done and then pay the sales taxes all over again when you go to buy the parts to fix it.

19 posted on 09/26/2006 6:52:51 AM PDT by tacticalogic ("Oh bother!" said Pooh, as he chambered his last round.)
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To: pierrem15
A little something to help the new and used car dealers associations (one of the biggest guilds contributing to state and local government).

I think if they could, they'd outlaw self-sufficiency outright.

20 posted on 09/26/2006 6:54:43 AM PDT by tacticalogic ("Oh bother!" said Pooh, as he chambered his last round.)
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To: steveegg
This is going after private sales, not dealerships. I am not in favor of higher taxes anywhere, but this came about because of abuse of the system.

Many years ago, father in law gave us a car. The gift tax was higher than if he would have sold it to me.

21 posted on 09/26/2006 6:55:47 AM PDT by SouthTexas (Of course it's hot, it's summer!)
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To: Dubya
The measure was among several bills passed by the Texas Legislature to generate money for school financing.

And Gov Perry.

I wonder where all the monies generated by our property taxes go, or the funds generated by the lottery....Perry and his money-grubbing cohorts need to go.

22 posted on 09/26/2006 6:56:37 AM PDT by Sarajevo (AAAh! Baghdad-dust, heat, more heat and more dust. I wish I had a beer.)
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To: P-40

They've been doing this up here in Massholechusetts for years now. Welcome to the club (sarcasm)!


23 posted on 09/26/2006 6:58:08 AM PDT by GOPsterinMA
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To: SouthTexas

Guess it's time for another tax revolution.


24 posted on 09/26/2006 6:58:26 AM PDT by steveegg (Let's make the deeply-saddened Head KOmmie deeply soddened in Nov. - deny the 'RATs the election)
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To: Dubya

Always sneaking one more tax in on us.


25 posted on 09/26/2006 7:01:38 AM PDT by freekitty
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To: Dubya

What really chaps my @ss is the fact that the Republicans have done this while sitting on an eight billion dollar surplus.


26 posted on 09/26/2006 7:03:27 AM PDT by TheDane
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To: daviddennis

It could make some cars cheaper. I would subtract out the tax amount from what I would be willing to pay. Of course some people wouldn't be able to figure that out (public schools provide great educations).


27 posted on 09/26/2006 7:12:06 AM PDT by zek157
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To: Dubya

This is simply wrong and should be challenged in court.


28 posted on 09/26/2006 7:16:40 AM PDT by ARA
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To: joebuck
I'm betting it will. In Oklahoma it does. And the nifty thing is you are taxed on what you paid for the used vehicle, if it's more than the assumed value, if less you pay the government's "value". And you can't call and get the government "value", it's like a state secret! It is charged every time the car is retitled to a new owner. Also you have to actually take the vehicle that was bought out of state to the tag agency so they can look at it, paperwork is not enough. Why this is part of the registration process is a mystery to me.
29 posted on 09/26/2006 7:19:12 AM PDT by pepperdog
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To: steveegg
Way past time for that!

Actually think this is more of an overreation by those buying cars for five grand and reporting the sale as five hundred.

30 posted on 09/26/2006 7:24:58 AM PDT by SouthTexas (Of course it's hot, it's summer!)
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To: Dubya

first they tax us outta our homes, now they are going after the used cars.... note, this is used cars, i.e. someone wise enought to not buy new or "POOR" folk who can't afford new!!!

it's pure EVIL!!! :)


31 posted on 09/26/2006 7:27:44 AM PDT by fhlh (Polls are for Strippers.)
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To: Dubya

Welcome to the state of Taxes (note new corrected spelling). Yet anotehr reason not to vote for Gov Goodhair. I will vote for Kinky.


32 posted on 09/26/2006 7:30:41 AM PDT by Hydroshock ( (Proverbs 22:7). The rich ruleth over the poor, and the borrower is servant to the lender.)
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To: Hydroshock

Kinky is for this kind of garbage, too. He's a liberal who talks tough.

That said, maybe we should tax hair gel,face cream, and manicures so Gov. Goodhair will leave the state.

They are ALL losers, this year.


33 posted on 09/26/2006 7:50:26 AM PDT by MeanWestTexan (Kol Hakavod Lezahal)
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To: steveegg

I just recently purchased a vehicle. When you go to the court house you can put whatever you want down as the price you paid......no questions asked.

However, there is a BIG sign there that says if you falsify this amount and you're caught the penalty is something like $1,000.00 and jail!!

Obviously I gave them the right amount.


34 posted on 09/26/2006 7:55:32 AM PDT by WestCoastGal (Monte Carlo????? Jr??)
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To: Dubya

"A $500 difference in the price of the car would only be $31.25 difference in sales tax," she said. "For most people, that's hardly worth arguing over. Some people will win and some people will lose."

As a kid, a few neighborhood guys and I had got in the habit of swiping an apple apiece from an old man's tree that sat close to a fence on the way to our school.

One day this petty theft came to a halt when he caught us in the act and after threatening to call our parents and the police convinced us without the use of violence that whether the apples were stolen one at a time or all at once, made no difference to the bare tree.


35 posted on 09/26/2006 7:59:40 AM PDT by Old Professer (The critic writes with rapier pen, dips it twice, and writes again.)
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To: Dubya
Can't wait to see how people will get around this and shove it back in their faces.

It's easy to get a used car dealer to vouch for ya.

36 posted on 09/26/2006 8:00:52 AM PDT by unixfox (The 13th Amendment Abolished Slavery, The 16th Amendment Reinstated It !)
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To: stephenjohnbanker
Called "standard presumptive value," tax assessor-collectors will use a Texas Department of Transportation guide to determine a vehicle's value, regardless of how much a person pays for the car.

But from the article it looks like Texas is going to get it worse. If I at least show up with a "reasonable" sale price, they won't check. Texas is going after an amount that is close to the retail price if I read the article correctly.

Good luck with this Texas, you may not have PIT, but you sure seem to be getting rolled over the barrel on this one.

SZ

37 posted on 09/26/2006 8:08:44 AM PDT by SZonian (Fighting Caliphobia one detractor at a time)
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To: K4Harty
So next time I go to a garage sale or flea market can I expect a tax bill from the state on the "assumed value" of the used items, etc. that I purchase? Sounds like a greasy slide toward a pile of ....

Just wait until you get taxed on the "imputed income" from living in your own house. Some politicians cooked up the idea that the fair rental value of your home is taxable even if you are living in it. They figure you are depriving the state of tax revenue by sitting on an asset that could be generating taxable income. They reason that you are getting a benefit by not have to pay that rent yourself for living in that dwelling (even though you are the owner and landlord). This is, of course, omitting any revenues from property taxes that they also assess.

38 posted on 09/26/2006 8:08:50 AM PDT by Myrddin
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To: unixfox

Since I have a house/ranch in New Mexico, this will be easy.

Needed to become a NM voter, anyway.


39 posted on 09/26/2006 8:20:27 AM PDT by MeanWestTexan (Kol Hakavod Lezahal)
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To: Dubya

And what they are also doing is establishing precedent for if and when Fair Tax comes to pass: by saying they can tax private transactions, they can tax anything twice.


40 posted on 09/26/2006 8:28:07 AM PDT by Maigrey (Airport Security - Useless Kabuki Theatre. - Ann Coulter)
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To: Dubya

Colorado does this. They go by Blue Book value. Kind of sucks if you are buying a relatively recent car that needs work.


41 posted on 09/26/2006 8:30:51 AM PDT by KellyAdmirer
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To: Dubya
Buyers will pay taxes based on a state assessment of the value, even if they paid less for the vehicle.

Duh, I thought this was already the case everywhere. I discovered how the system works when my father sold me the keys to his old car for $799 and the car for $1. The DOT would not let me get away with paying taxes only on the one dollar cost of the car.

42 posted on 09/26/2006 8:34:40 AM PDT by JoeGar
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To: Dubya

Well, if it's for the cheeren.


43 posted on 09/26/2006 8:38:02 AM PDT by ichabod1 (Political Correctness is communist propaganda writ small.)
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To: cheme

Without looking at it.


44 posted on 09/26/2006 8:38:29 AM PDT by ichabod1 (Political Correctness is communist propaganda writ small.)
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To: SouthTexas

In Tennessee a few years back, I bought a car from my brother-in-law for 3,000. When I went to the clerk to get new tags I gave the correct price. After I told her I bought the car from a relative she marked out the price and wrote in Gift. No tax was levied. I was amazed.


45 posted on 09/26/2006 8:38:39 AM PDT by eyedigress
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To: The South Texan

Texachusetts. I know, I'm going to be lynched for saying that, probably before lunch.


46 posted on 09/26/2006 8:39:33 AM PDT by ichabod1 (Political Correctness is communist propaganda writ small.)
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To: JoeGar
The DOT would not let me get away with paying taxes only on the one dollar cost of the car.

Which kind of makes the point that this is not a new tax. It has been on the books for decades. Only it was a tax on the honest, because everyone else just lied and said the car was a gift, or that they paid $100 for it.

47 posted on 09/26/2006 8:42:43 AM PDT by Pilsner
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To: tacticalogic

Scrap yard, hell. Dump the car on the governor's lawn and say "Here, it's a gift, YOU sell it and pay the tax."


48 posted on 09/26/2006 8:43:15 AM PDT by Larry Lucido
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To: SZonian
you may not have PIT

No, instead of that we're getting the "business tax" where they charge the income tax to the business before the business pays you.

49 posted on 09/26/2006 8:45:44 AM PDT by ichabod1 (Political Correctness is communist propaganda writ small.)
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To: tacticalogic

I was given a 1954 Ford Pickup by my uncle a few decades ago. I had to pay tax based on "what it was worth" but they didn't call it a "sales tax". I was steaming mad until they told me that, at which point I shut up.

Being a black and white thinker, I believed that if they called it a sales tax they could only tax the amount of money that changed hands, but if they called it anything else, they could pretty much charge what they wanted. They based it on a $500 value - and I quietly paid it.


50 posted on 09/26/2006 8:52:51 AM PDT by RobRoy
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