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In line at the DMV to register my car.
I listen to fella ahead of me attempt to claim that he already paid a sales tax.
The DMV in this state has two parts. Plates and Department of Revenue (sales tax).
Both state A and state B have a sales tax.
This fella. Call him Bob.
He purchased a new car in state A.
There is a sales tax in state A. But collected at DMV when car is registered.
Bob never went to DMV and never paid any sales tax to state A.
Bob had previously obtained employment many states away. State B.
He had already set up residence in state B.
He took all necessary documents for new car from state A to state B.
He obtained plates and paid a full new car sales tax in state B. So he had plates and insurance from state B. So that he legally drove new car from state A to state B. He drove car from state A to state B with state B plates/tags.
He lived/worked in state B for 7 years.
Employment changed and Bob moved back to state A.
At state A, Bob, was in front of me in line speaking with the Dept. of Revenue supervisor. Tax Man.
Seems that state A mandated that he pay full sales tax going back 7 years for new car he had purchased in state A. But the car was now 7 years old. Makes no difference stated the Tax Man. Bob has to pay full new car state A sales tax even though car is 7 years old. Tax Man stated that Bob had neglected to pay full sales tax (or any sales tax) to state A when he purchased it. There was no deduction just because he had paid state B sales tax. That was immaterial. The car was purchased new in state A and Bob owed full new car sales tax to state A - even though this is 7 years later and he had paid state B sales tax.
For me, State A is Alaska. No state sales tax. We do have a local sales tax...2 percent capped at $500. So the most I would pay is $10 if I bought in my home town. No penalty for buying in another town that doesn't have a sales tax.
Yes, it depends on the state. Some states make you pay a tax based on the fair market value of the car at the time you attempt to register it, it's not a "sales" tax. But that clerk was wrong... I don't know any state that would make you pay a tax based on the price you purchased the vehicle for over 7 years ago and knowing it has been registered in another state.
It would be nice to know what the states are so we can look at the various laws.
Did Bob have proof of having paid sales tax in State B? If not, it's possible State A has no reason to release him from paying them the tax that was originally owed them.
IIRC, there was a post on C-D similar to this not too long ago. Car bought in MA but registered in RI. Owner paid tax in RI but didn't have record. Moved to MA a few years later and had to pay the sales tax again.
I take there was no reciprocal agreement between the states.
Not that it matters now....
But I'd like to know If Bob 7 years ago, knew full well, he should have paid sales tax to state A. And wanted to get away with not paying twice on the same car.
My question is, how did the subject even come up? When I moved from Illinois to Iowa years ago I handed over my Illinois plates and registrations, paid the Iowa registration fee, and was given Iowa plates and registrations. That was it. Ironically, all three vehicles we owned at the time were purchased in Iowa, but obviously that was of no consequence.
I get that the laws vary by state, so it would be nice to know what state we're talking about here. But based on my experience I think I would have punched the clerk in the mouth.
I take there was no reciprocal agreement between the states.
Not that it matters now....
But I'd like to know If Bob 7 years ago, knew full well, he should have paid sales tax to state A. And wanted to get away with not paying twice on the same car.
Yes, all states may vary as to rules.
The rule in state A is that if purchased in state A a sales tax is required. The dealer does not collect the sales tax in State A - the Dept. of Revenue AT the DMV collects the sales tax. Since Bob did not go to DMV upon initial purchase - no sales tax collected in state A at that time.
It appeared that Bob did not know how the laws worked.
There may have been a reciprocal agreement between state A and state B. If Bob had paid sales tax initially in State A he may have been able to avoid sales tax in state B initially.
It appeared that no malice was intended by Bob. He had already obtained residence in state B but purchased new car in state A and drove directly to state B. Initially Bob lived in state A.
Sate A rules are clear. If purchased in state A - a sales tax is required to be paid to sate A.
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