I live in New York. If I buy a car in Connecticut do I have to pay taxes on it for both states? Anything else I have to know? Thanks.
We live in Texas (or as we say here “Tax Us”. In one instance where I paid Arizona tax I paid no
Texas tax and the clerk said I actually paid a bit more tax than if I paid Texas Tax. In a second case I bought another AZ car, paid no tax there and then Paid Texas tax. Your experience may differ but it seems there is a reciprocity agreement between states that evens things out.
Check with the car dealer that you may buy from and ask him if Connecticut allows for a no sales tax transfer out of state. Missouri and many other states allow this kind of transfer, knowing the item does not stay in state for taxation purposes. You then pay sales tax on the vehicle in the state where you are licensing it. Kansas collects sales tax at the dealer on the bill of sale, and does not allow for such a transfer, but Missouri allows credit for any sales taxes paid to Kansas. Private sales also follow different rules in KS.
As you can see, you need to ask the right questions from either the DMVs involved or the dealer involved.
No. Tell the dealer that you will register it in NY and you will only pay taxes in NY. Since CT is so close, they may be able to help you with your NY registration.
I assume you are talking about the sales tax on your purchase. Sales taxes are based on a state’s established tax rate with some added percentages among some counties in that state. Since you bought your car out of your state of residence, you will pay that state’s tax rate for the purchase.
Your registration fee (tax) will be paid to your home state, assuming you’re going to register it there.
A car dealer is familiar with the situation faced by an out-of-state buyer. Inform your CT dealer that you will need NY registration and he will advise you of the correct procedures to avoid double taxation.
Check with each state’s tax department. They will give you the true facts. It varies from state to state. Don’t rely on the dealer to figure it out, they may not know and some will tell you anything to get you to buy the car.
You will pay New York at the DMV as part of the fee for registering the car the first time. No tax for Connecticut.
Living on Missouri I bought a car since my previous was totaled by someone and then 1 month later moved to Illinois or ILL & ANNOYED. I paid Mo. tax and was told I had to pay IL. tax since I brought it into IL. within 6 months of purchase. Well, my wife left without getting the IL. plates to talk to me about it. I simply waited 3-4 months and went back to the DMV and they did not say a word about it. Who can figure?
My mom went through this trying to buy a Subaru in Massachusetts while living in NYC (primary residence). The dealer gave her some BS line about having to pay Massachusetts sales tax and then getting a refund after paying New York sales tax. Anyone who has ever dealt with Massachusetts knows that once you pay them tax money you will NEVER, EVER get it back. The truth is that, as a New York resident, sales tax was only due to New York State and the dealer did not know what the heck he was talking about but did not want to lose the sale. I told my mom to come to Victor, NY to visit the #1 Subaru dealer in the nation. She got a better price, easy sales process, and no hassle on paying sales tax. I shiver when I think of how she would have fared with the dealer in Massachusetts.
Each state has its own laws regarding sales tax applicability, so you need to check with the revenue department or DMV in your home state. Most states have reciprocity agreements under which sales tax paid in one state offsets tax you would owe in your home state when you register the vehicle there for the first time. Of course, if NY sales tax rate is greater than CT sales tax rate, you will be charged the difference as a use tax when you register your vehicle in NY. All of this assumes that you intend to register the vehicle in NY and not in CT.
It’s really a usage tax. You pay the tax where the vehicle will be registered.
I am in a similar situation. NYS resident. Bought a car in Vermont when I was spending more time there, paid sales tax to VT at time of purchase, which dealer said was mandatory. Kept renewing when I had an address there. Now, 4 1/2 years later, not spending time in VT, no valid address. VT registration is about to expire, and if I get a NYS registration they want the full tax amount. Vermont does not give credits. NYS has a form I can file to get a credit but when I called the NYS sales tax department the person on the phone basically laughed at the notion that I would ever get anything back. NY and VT do not have a reciprocal arrangement. Do I buy a new car or eat the tax?