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.
And Gov Perry.
It's for the kids.
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
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.
So someone buying a car cheap because it needs work is going to get taxed as if it's in good working order. Nice.
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.
The government is an organized crime syndicate specializing in extortion.
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
Guess the car dealerships are going to be very busy on Saturday.
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 ....
A little something to help the new and used car dealers associations (one of the biggest guilds contributing to state and local government).
Quote of the day. Mind if I borrow that for a tagline after the election?
Would this apply if the vehicle was purchased out of state?
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!!
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.
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.
I think if they could, they'd outlaw self-sufficiency outright.
Many years ago, father in law gave us a car. The gift tax was higher than if he would have sold it to me.
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.
They've been doing this up here in Massholechusetts for years now. Welcome to the club (sarcasm)!
Guess it's time for another tax revolution.
Always sneaking one more tax in on us.
What really chaps my @ss is the fact that the Republicans have done this while sitting on an eight billion dollar surplus.
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).
This is simply wrong and should be challenged in court.
Actually think this is more of an overreation by those buying cars for five grand and reporting the sale as five hundred.
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!!! :)
Welcome to the state of Taxes (note new corrected spelling). Yet anotehr reason not to vote for Gov Goodhair. I will vote for Kinky.
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.
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.
"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.
It's easy to get a used car dealer to vouch for ya.
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
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.
Since I have a house/ranch in New Mexico, this will be easy.
Needed to become a NM voter, anyway.
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.
Colorado does this. They go by Blue Book value. Kind of sucks if you are buying a relatively recent car that needs work.
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.
Well, if it's for the cheeren.
Without looking at it.
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.
Texachusetts. I know, I'm going to be lynched for saying that, probably before lunch.
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.
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."
No, instead of that we're getting the "business tax" where they charge the income tax to the business before the business pays you.
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.
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