Here in Canada the onus is on the seller to collect and remit sales tax to the provincial government. Only on a private sale does the buyer remit the taxes when registering the vehicle. As for the OP, I know I’d raise bloody hell before I’d pay one red cent. If they made the error and you weren’t misleading the dealer let them fix their mess.
OP paid cash for the car. He said the dmv fees were paid by him. He owns it free and clear. I believe he even said he has the title in his possession
Since the dealer wrote n/a in the sales tax line, it sounds like they should be the ones dealing with dmv, if necessary
From an ethical standpoint I agree, but this is a legal question, not an ethical one.
There’s a number of ways things could have gone and which has led to this point; some of them not very ethical in nature.
It seems to me if there was a legitimate problem with the DMV they would have stated this at the time the car was registered and titled.
A quick look shows an L.A. Times story about unremitted sales taxes (1.4 billion) and car dealers were in the top third of worst offenders by collecting taxes and not turning them over to the state of CA.
One Chrysler dealer was shown to owe 800 grand in sales taxes and is still in business after dropping the Chrysler line and reincorporating as a used car dealer.
That doesn’t promote much confidence in handing money over to any dealer…
I agree that the dealer is legally required to give the applicable sales tax to the DMV
However, since they clearly wrote n/a on the sales tax line in the paperwork, that implies that the buyer is not the one who’s required to pay it. By writing n/a in that line, they absolved the buyer of that responsibility
It seems to me that the dealer needs to eat their mistake and pay the sales tax themselves
As we’ve mentioned earlier, a quick visit with a lawyer should clear it up
I am in agreement with db4690.
The sales agreement was a contract.
One of the most basic principles of law is that all enforceable details of a contract are “contained within the four corners of that piece of paper”. Thus, after the fact, it is not possible to re-think the terms of the contract unless both parties agree to that change and sign-off on it.
So…my thinking is that this additional tax can only be collected IF the OP agrees to it.
However, I am not an attorney, so the OP needs to consult with an attorney.
Here’s my take on it based on only my experiences.
The dealer does a service for the state/county and buyer in collecting the sales tax and sending it to the state.
In some states, the DMV acts as this agent or at least another gate keeper to ensure the state/county gets their money.
The buyer is ultimately responsible for satisfying the tax bill.
While the seller may get in hot water over not collecting the tax, there may be reasons (like some have already mentioned) why this was deferred. I personally have had to satisfy sales tax obligations myself when they were complicated by dealers not set up to collect and distribute funds to other municipalities outside of their own.
You can tell them to pound sand but I suspect they may just turn around and tell you the same. Then they will contact the state to make sure they know you haven’t settled up.
You owe the tax, you said you suspected something was amiss when the sum at closing was less than you suspected. Suck it up and pay it. Like mentioned, if it’s a burden now, you may be able to work something out either with the dealer or the state but they aren’t going to forego payment.
My double lincolns…
I have to say my scam antenna is up on this one. I certainly have trouble believing that you have to pay it by the end of the week, if indeed you owe it at all.
If this happened to me, I would probably call the salesman back and apologize for any inconvenience. “I just wanted to let you know that I got your message and am looking into it. I’m going to call the Attorney General’s office and ask them how I should proceed in satisfying the tax burden. I’ll get back to you as soon as they tell me.”
The reason I would do this is that if he’s scamming you, the minute he hears “Attorney General” he’ll shut down the scam, at least for you.
At any rate, as I understand sales tax, the merchant is responsible for paying tax on the dollar amount that he sells. So if the sales tax is 10%, and I sell you a $10 Car Talk mug, I owe the state $1. I can either collect that from you, therefore charging you $11 and putting $1 of that into a separate account for sales tax payments, or I can eat the cost of the sales tax myself, and only make $9 after I give the government their $1.
This link may be helpful:
http://www.boe.ca.gov/sutax/faqtaxrate.htm
Note the line under question 1: “Whether or not a retailer collects sales tax, the retailer is liable to report and pay the tax due.”
I also note that in a quick Google search I’m finding an awful lot of “California dealership forgot to charge sales tax” questions spanning many years. I suspect we’re dealing with a dealership that wants to make extra money by “collecting the tax” after you’ve already taken the car home.
My instinct here would be to tell them to kiss off, but you might wish to ask the attorney general first.
Exactly. If you have met all your requirements and need not do anything more am with @proacfan. I would do as he and @db4690 suggest. But, make sure every thing is in order with the state as far as your responsibility is concerned. State services are helpful for free, at least our state in matters like this. Lawyers are expensive.
My thought is. If you already went to the DMV and got you title and registration, the DMV considers you compliant in meeting their requirements. The dealer has no say in getting your registration revoked.
Thanks for all the commentary on this situation, it is still not resolved.
I showed the contract to the business manager at another dealership I work with and have purchased from, and they told me that the dealership that ‘forgot’ to charge the tax on my cash purchase is at fault, they have to own up to the mistake. And they signed off on the deal, the state is happy in that they sent me the title and registration/plates, and they are in my possession. The other business manager told me that the tax is already paid, by the problem dealership, and now they are just bluffing me to get me to pay them back for their mistake.
I originally of course thought ‘oh, I need to pay them right away’ but now I don’t think so. I am waiting to hear back from the customer relations manager at the problem dealership. She of course didn’t answer her phone. Not once yet has anyone there actually picked up my calls and talked to me. So professional. Toyota won’t do anything more until one more day has passed and the dealership hasn’t responded to them about the situation.
Thanks for the update . . . very interesting
Anyways, here’s something to consider. The customer relations manager at the problem dealership may say you need to pay them, even if you don’t. In other words, they may straight out lie to you.
Some dealership personnel are very unscrupulous, to the point of doing illegal things.
I have even had phony documents with my forged signature shown to me, with an explanation that I need to pay more money. I went to the service manager with the document, showed it to him and told him it’s not my signature. He asked me who I had been dealing with, and when I told him, he said the matter is closed.
But definitely talk to a lawyer anyway. A letter from a lawyer’s office might go a long way toward getting the dealer to accept his obligation and leave you alone.
My guess is that the salesman made the mistake and he is on the hook to the dealer for the loss. That is why the salesman sent you an email and made the telephone call. As “the same mountainbike” recommends, take up the matter with an attorney. Show the lawyer a copy of the email.
As I said earlier, if the dealership knew you owed the money, you would have received communication by U.S. mail and probably a certified letter.
I agree, and the business manager should of been the one doing all the communicating…
@talos–I bought a Chevrolet Uplander for cash back in 2006. After I had the paperwork in hand, I received a call from the business office of the establishment telling me that they needed my social security number. I debated the point and went in to talk to them. They did show me the law that required the social security number for any cash amount over $10,000. Apparently, the cashier’s check I gave them was considered cash. Several years later, I bought a new Toyota Sienna and paid by personal check. That dealer didn’t ask for my social security number because I wrote a personal check instead of obtaining a cashier’s check. At any rate, this was handled by the business office and not the salesman.
Just a note about corporate Toyota; and this is true of all car makers. Dealers do shady things and Toyota Motor Company is really not going to care much at all as long as sales are decent.
The only way TMC would ever yank a franchise would be if there is wholesale fraud going on with a lot of negative PR and things are being done which affect cars sales total numbers.
I think you’re in the clear on this and Triedaq is correct. Car salespeople are on thin ice all of the time and it doesn’t take much for them to fall through and end up unemployed. It’s a brutal business in spite of the clean offices, soft spoken words, smiles, etc and to be honest; I have a certain amount of sympathy for car salesmen. It’s definitely not a profession I would ever want to be involved in.
Remember, my first suggestion was to go to the DMV and find out what the actual sales tax should be. CA sales tax is 7.5% except for special tax districts where it can rise as high as 8,5%. A sales tax of $2700 would mean that you were in one of those special districts, bought the top of the line XLE, did not get any discounts and did not have a trade in.
I recommended that you check with the DMV in case the dealer is not only trying to recoup from a mistake, they may also be trying to make a profit on it as well.
The tax rate is 9%, you pay whatever it is for your home address. Yes, no trade so it was not reduced by that amount.
I am suspicious they are trying to get more than they should, but won’t say that out loud…Them still not calling me back is not helping my feeling its fraud too…