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Old 08-30-2014, 09:35 AM
 
2 posts, read 13,372 times
Reputation: 11

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Hi, and thanks in advance for any help.

Six years ago, my then-partner took out a car loan for a car I needed for work. I made every payment and paid off the beast in June of this year. There was no other transaction that occurred, I.e., once the car was paid off it was considered mine, and I didn't give him any additional money.
Fast forward to yesterday, when I went to my local DMV to finish the title transfer. Mistakenly the amount written in the purchase price field was the actual sale price of the car. Consequently I was hit with a 500 dollar use tax. I couldn't pay any of it immediately, so I left frustrated.
Can I explain this situation to the DMV and will they accept that it was a mistake? Technically, the purchase price was zero dollars, right? The bank has already signed off the title. Do I have any chance of success? The DMV also has the physical top third of the notice of transfer/release of liability, so it's not like I can just write in the correct purchase amount.
Thanks again for any advice....
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Old 08-30-2014, 11:22 AM
 
9,751 posts, read 9,402,991 times
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Lets look what you have said that we can assume are facts.\

1: The title was not in your name.

2: You want to put the car in your name now.

3: The DMV wants to know what you paid for the car. Not that it is paid off and there is no money owed. You gave them that figure of what you actually paid for the car, so now you are stuck for that as the value of the car.

4: When a person buys a car, either the dealer collects the taxes, or if from a private party the state collects it.
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Old 08-30-2014, 12:26 PM
 
Location: Carmichael, CA
2,106 posts, read 3,523,911 times
Reputation: 3475
Do you still have contact with then-partner? Go to the DMV website and print out a Statement of Facts form. The first section is for gift or family transfers. Check that it's a gift, and in the "Value ___" section, write that same purchase price that's on the title.

On the second page of the Statement of Facts, there's a section of blank lines. Write in that a mistake was made on the title and explain the whole story. If then-partner is available, have them also sign the Statement of Facts.

Take everything back to DMV. They may also have you fill out an Error Statement regarding the price on the back of the title, or may just accept the Statement of Facts.

People put the wrong stuff on titles all the time--that's why there's so many additional forms to explain everything. You shouldn't have to pay any UseTax.
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Old 08-30-2014, 12:42 PM
 
Location: Under the Redwoods
3,751 posts, read 6,730,450 times
Reputation: 6078
So the car was in his name and you made the payments.
You cannot put zero dollars. Regardless of who paid for the car, when a title is transferred, it is the tax on the value of the car. But the purchase price is wrong, as that was the value of the car 6 years ago. The car has since lost value. Putting the actual value of the car may help lower the tax.
And as for the gift transfer, that only woks for family members. Too many people avoiding the transfer taxes by selling the car but saying it is a gift. So while it may be put on paper that it was a gift, be prepared to pay the taxes on it.
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Old 08-30-2014, 06:29 PM
 
Location: Carmichael, CA
2,106 posts, read 3,523,911 times
Reputation: 3475
Quote:
Originally Posted by OwlKaMyst View Post
So the car was in his name and you made the payments.
You cannot put zero dollars. Regardless of who paid for the car, when a title is transferred, it is the tax on the value of the car. But the purchase price is wrong, as that was the value of the car 6 years ago. The car has since lost value. Putting the actual value of the car may help lower the tax.
And as for the gift transfer, that only woks for family members. Too many people avoiding the transfer taxes by selling the car but saying it is a gift. So while it may be put on paper that it was a gift, be prepared to pay the taxes on it.
Your information is incorrect.

The tax is not on the value of the car, it is on the money that changed hands at the sale. Per OP's first post, it appears that the car was purchased by OP but in the name of then-partner for car loan purposes. That's when the sale took place and Use Tax would have been paid at that time.

This transaction is to change the title name to OP--no additional money was paid to then-partner, so no "sale" took place. This happens more than you'd think, when the buyer can't get qualified for a loan and a friend or family member "buys" the car on their behalf.

"Gift" and "family transfer" are actually two totally different things and are reflected as such on the Statement of Facts.

The instructions that I gave are valid. If the Board of Equalization, that reviews every vehicle transfer, feels that taxes are due, they will correspond with the OP and it can be debated further at that point.
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Old 08-31-2014, 10:19 AM
 
2 posts, read 13,372 times
Reputation: 11
Hey! I'm super appreciative of all if this info. I will follow cb73's advice. I do have contact with my then-partner, so hopefully this matter will be straightened out soon. Thanks, all of you!
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