buying out of state cars - do you pay sales tax? (luxury car, 2011)

[SeaWorld Bound]

reason I ask, is we have found a few cars out of state. this new way of buying anything online, is different. you haggle over the net to a good price. then fly or drive to the car and drive home. someone told us we don't pay their state sales tax. my hubby started looking for answers to this, but of course, the gov't. doesn't have straight answers. not very clear and straight to the point website.
so, buy out of state, no sales tax. then register in our state, then pay. I hope our state is one of the fair ones.

off subject a bit, sorry mod, but is this buying a car- not even seen, and then going to go and pick-it up, a good way to do it? I mean what if its not what they stated. I have learned the hard way buying used other misc. items, the buyer can take photo's a diff angle or just state used. any advice on doing it this way? looking at a very low mileage 2009. if not that year, then will buy a new 2010 when those prices drop, but will not get the color I would prefer. what is it with black leather interiors!! thanks again everyone. I do appreciate the help, as I still get talked-down to by the salesmen. and I'm the one, who will be making the final decision.

[car54]

Originally Posted by Lux Hauler

Details, what details? A wad of cash, a title, and the number you write on it. Unless you're financing with an auto loan then you would have to be a total moron for any sort of issue to crop up.

I had a friend that bought a car and did what you suggest....falsified the sales price to beat some taxes. After a few months, the car was siezed....it turned out the car was stolen and had a fraudulent title. DMV admitted they screwed up and agreed to re-imburse him for the cost of the car.

Trouble is, he paid 5 grand for the car, but only paid sales taxes on a (false) $1000 sales price...guess how much the State paid him?

My friend is far from a "total moron"....things can crop up that can't be anticipated. He gambled and lost.

Kind of like those fishermen in the Gulf...after cheating on their income taxes for years....BP will probably only be liable for the income they reported to the IRS.

[deerislesmile]

Originally Posted by square peg

I generally buy older vehicles, sometimes from out of state. The tax gets paid in VT when I go to DMV. In spite of a good deal that I may have gotten or some paperwork that has been altered a bit, they haul out the Kelley Blue Book and say THIS is what you owe - at 6%.

It's this way in Maine as well. You could have a bill of sale that says you paid one dollar for a car...doesn't matter in the least- you pay your tax based on the Kelley value, not what you actually paid for the vehicle.

[square peg]

If you think about it, it's only fair to charge market value. Imagine buying your grandmaw's house for a dollar and paying taxes based on that.

Hey Deerislesmile - The missus and I spent a few days in Stonington last fall. Loved/hated the bridge in Bucksport!

[ShelbyGirl1]

When registering the car in YOUR state, you will be asked to show what you paid for the car. (At least for a new vehicle...our only exp. with this). You will pay taxes to your state.

[Lux Hauler]

Originally Posted by car54

I had a friend that bought a car and did what you suggest....falsified the sales price to beat some taxes. After a few months, the car was siezed....it turned out the car was stolen and had a fraudulent title. DMV admitted they screwed up and agreed to re-imburse him for the cost of the car.

Trouble is, he paid 5 grand for the car, but only paid sales taxes on a (false) $1000 sales price...guess how much the State paid him?

My friend is far from a "total moron"....things can crop up that can't be anticipated. He gambled and lost.

Part of not being a moron is checking for a clean title and VIN before purchase. Are you saying that the fraudulent title AND stolen car was COMPLETELY undetectable? Either way that is an extremely rare case, I wouldn't even consider it a gamble gone bad but rather a freak incident.

All i'm saying is that it has worked in the past, many times, without any troubles to report.

[Merc63]

Originally Posted by square peg

If you think about it, it's only fair to charge market value. Imagine buying your grandmaw's house for a dollar and paying taxes based on that.

On the other hand, when you buy shoes at a bogo sale, do you pay sales tax on the retail value of BOTH pairs?

If you buy a sofa at a 1/2 off clearance sale, do you pay sales tax on the original manufacturer's suggested retail price? if you buy a car new and manage to haggle it down by 2000-5000 dollars, should you pay sales tax on the sticker price?

I don't care how much the car might be worth in some book. If I paid X for it, I should only have to pay sales tax on what I actually paid for it. And yeah, if you buy a family house for a buck, you should only have to pay sales tax on that buck.

As to the OP, yes, if you buy a car out of state, you will not have to pay sales tax in THAT state, even from a dealer, usually. But you WILL have to pay sales tax when you get back to your home state.

...................

As for buying a car out of state, sight unseen, the answer is... it depends. There really is no reason other than screaming deal to buy a common car out of state sight unseen, unless you're looking for a specific year/option combination within your budget. A less common car, or specific older car, often out of state is the ONLY way to find what your looking for. If you do go the out-of-state route, make sure up front that you get lots of clear pictures (or even video) of as much of the car as you'd look over in person. See if you can get an independant inspection. If it's a type of car you've never owned before, get online to model specific forums and ask for (or look in the search function) to find out common problem areas, so you can ask specific questions about the car in question. The more you know beforehand, the better off you are.

I bought my current daily driver BMW 740iL 3 1/2 years ago on ebay from a wholesaler in Connecticut. I live in Baltimore, 6 hours away. I found the common problem areas and asked about them/had specific pictures taken. I paid my deposit right there and the rest when I picked up the car. The car in person was as advertised, and as the pictures showed. The car had 143k miles on it then, it has 180k on it now, and has been a wonderful driver. It can be done.

I'm the same if I sell a car: dozens of high res pictures available, and any questions asnwered with pictures and documents (and video if necessary).

[car54]

Originally Posted by Lux Hauler

Part of not being a moron is checking for a clean title and VIN before purchase. Are you saying that the fraudulent title AND stolen car was COMPLETELY undetectable? Either way that is an extremely rare case, I wouldn't even consider it a gamble gone bad but rather a freak incident.

All i'm saying is that it has worked in the past, many times, without any troubles to report.

He ran the VIN through NCIC and other databases (he was a cop) and no hits.

My point is lying to da man can come back and bite you. And advising others, on a public forum, to break the law...ain't too bright either.

Of course falsifying sales prices have been going on forever....but beware. Most State budgets are in worse shape than they've ever been and some are digging hard for revenue. My State is known to contact private individual vehicle sellers and ask what they sold their car for. So make sure your seller is willing to commit perjury in order to save you a few bucks...

[ShelbyGirl1]

Originally Posted by car54

He ran the VIN through NCIC and other databases (he was a cop) and no hits.

My point is lying to da man can come back and bite you. And advising others, on a public forum, to break the law...ain't too bright either.

Of course falsifying sales prices have been going on forever....but beware. Most State budgets are in worse shape than they've ever been and some are digging hard for revenue. My State is known to contact private individual vehicle sellers and ask what they sold their car for. So make sure your seller is willing to commit perjury in order to save you a few bucks...

We have been contacted by the State of Ca. on a # of cars we had sold to private buyers. Not sure what they told them....so we would always have to be truthful. So yes, States do random (and maybe not so random) checks!

[Drover]

When I lived in Wisconsin, the state contacted me and asked me how much the guy paid for the car I sold him. My response was "however much he said he paid." Never heard back from them.

Illinois has a more practical way of dealing with private-party sales: unless you pay more than $14,999 for the car, your tax is determined on a sliding scale depending on the model year starting at $390 for a car less than 1 year old down to $25 for a car that is 11 years old. If your car can reasonably be considered to have an FMV of $15K or less, you can use this schedule with no questions asked. But if you walk in trying to register a 1998 Ferrari F355 for $25, they're going to laugh you out of the office.