Would like opinions regarding a pending sale of a used car, related to sellers obligation/exposure to noting actual sale price on title vs. some reduced value for the purpose of reducing buyer’s sales tax exposure.
I always put down values under $1000 when I sell cars, it helps the buyer save money when registering it.
That would be called tax fraud. You report what the actual sales price was. In some states, if it is lower than the value, you’ll get taxed on the value regardless of the supposed sale price.
Depending on who you talk to at the DMV…
Some of these folks won’t even allow the fact that the vehicle was…in fact…FREE ! ( such as giving a vehicle to a family member )
No sales tax on anything here. Title transfer does require current odometer reading being accurate to the best of seller’s knowledge.
You didn’t give your state or country, but I’d assume that putting a false sale price on an official document is fraud pretty much everywhere. My opinion is that you should put down the correct price.
Yeah this is straight-up tax fraud.
Thank you to all that shared, I assumed as much re: tax fraud, want no part of that.
Tax fraud. Jail. New friends. Don’t bend over in the shower.
I tell the buyer that if they want to commit tax fraud they will have to commit forgery as well. Since the sale price is not on the title, it only is on the bill of sale in NY it would be very hard to catch someone submitting a phony bill of sale.
It varies from state to state, My grandmother gave me her car, she could have sold it to me for a dollar, and it would have made no difference as dmv determined the cars value, and taxed it on the determined value, not the sale price.
what if someone sold you a car that is in need of repair? like non running engine or needing a $1K timing belt replaced. that would be a good explanation to dmv to be on the lower side of the car’s value. it is certainly possible to have a lower than expected value.
works in mn, but this is also the truth, the seller and I both have the same number and it is corroborated. no jail for me.
Yeah, I have a veryhard time believing folks are paying blue book taxes on wrecked “parts” cars or other non-runners. I bought a '08 Mazda Tribute with a clogged cat for $500…had to fill out an extra form (with prior owner) justifying the below book price…but then it was all good.
I’ve given several cars over the years to relatives and made up an invoice to reflect the price by deducting all the necessary repairs to bring it to like new condition. So a $1500 car which would need a timing belt and other expensive maintenance, including tires would be soled for about $300 or so. The MVD accepts this as reasonable.
If you inherit a car you should have it appraised and use that value to hand in to the DMV.
In NY you have to pay no tax on a transfer between family members if it is a gift.
I don’t know what state you’re in but in most of them the states cover their bases on situations like this. They know this stuff goes on so they’re going to nip it in the bud.
Here in OK if you sell a car valued at 10 grand to a friend, relative, or total stranger for 20 bucks the excise tax is going to be based on 10 grand when the registration is changed.
^From what you’ve told me re: OK law, nothing would surprise me! (Like the whole idea about buying a car…and retroactively “owing” back title and plate fees from before you owned the car.) I can believe they’d want full retail on a car rusted into two pieces…
@meanjoe75fan, they would. If you buy a project car that is missing the engine and transmission they’re going to bill you just as if it were a complete running vehicle.
The tire disposal fee has one part that is really ludicrous IMO. Anyone who moves to OK and registers their vehicle gets hit with a tire disposal fee on the tires they crossed the state line with.
A buck for motorcycles and 2.50-3.50 for each tire depending upon rim size. Rollin’ in on the 20’s gets you hit with the higher amount…
“Anyone who moves to OK and registers their vehicle gets hit with a tire disposal fee on the tires they crossed the state line with.”
Say what? That’s nuts!
I guess he old saying is true: “never underestimate the power of stupid people in large groups” (the legislature).
I wonder who bought lunch for the legislature that day?