Buying a car out off state


#1

I will be buying a used car in Michigan and driving it to New York City where I live. Which state tax will I pay?


#2

You will get a lot of advice, both well-intended and possibly contradictory from folks on this site.
If they are wrong, you will be the one to pay the penalty–literally.

On questions like this, you need to ask the appropriate people, namely the DMV personnel in both states. Nowadays, most states have decent DMV website with FAQs (and their answers) listed. There is a good chance that your question is one of those FAQs, thus eliminating the need to call or visit a DMV office.


#3

Here is the link for a fact sheet on Michigan purchases that are being taken out of state within 14 days of purchase:

Call your local NY office to get their take.

It appears that because NY is a state with a reciprocity agreement with Michigan, you will pay Michigan sales tax not to exceed the amount you would pay in NY if it is less (How Michigan may know what that rate is, I have no clue). Due to reciprocal agreement, you get credit for the tax paid to Michigan when you title and license in NY.

I would find out my NY tax rate and know that when I went to Michigan. I would also print the Michigan fact sheet in case the dealer is unaware of the agreements are.

Note this is my interpretation of what reality seems to be – your reality with both bureaucracies may vary.


#4

It may depend on whether you are buying it from a licensed dealer or a private party… A Dealer might be able to provide you with a temporary permit and charge you no sales tax. Then the entire tax, title and registration process takes place in N.Y.

I purchased an out-of-state car once, and armed with the title, which the seller sent me, I purchased a temporary permit in my home state and flew to the cars location, picked it up and drove it home…Painless…