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Thanks for the very clear explanation! The car tax was a surprise to me when we moved here two years ago but It doesnt bother me at all considering how much I am saving in AutoInsurance vs. New York crazy autoinsurance prices.
What is really amusing is the tax bill that I receive for my cat every year.
Actually I have lived in DE almost 40 yrs and you do pay a luxery tax when you buy a car in Delaware ...one of those hidden taxes. But no we have no sales tax.... they get you with the school tax instead. Can't wait to move...
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Originally Posted by KatieNK
Good info to know. I live in Delaware and we don't have sales tax or car tax, but this is a cheap state all around.
Couple questions here. I am a recent college grad from Ohio and I came down to Holly Springs to stay with my family and see if I like the area. I have been here since May. I bought a new car in May and I got the tax bill in the mail a week ago. Unfortunately, I can't find the bill and I can't remember who I am supposed to pay it to. It was for like $200+. Can I just go to the local DMV and get another copy sent to me? Is that who I am paying the bill to? The car is registered in my parents address but I still have my Ohio drivers license because I'm not sure yet if I'm going to stay or go back. Will they hassle me about this at the DMV? Last question: If I decide to sell my car before the bill is due (mid September I think) and move back to Ohio am I still responsible for paying the tax? North Carolina is a nice place but after living in Ohio all my life and leaving all my friends behind and everything I know I feel out of place here.
The "Car Tax" question seems to come up quite frequently when people begin to look hard at the economics of moving to NC. I thought it might be helpful to post the FACTS about what the tax is and is not.
In NC, your car is subject to a "Personal Property Tax" because it is a titled instrument with a registration number. A Boat would fall into the same category if you have one of those, too.
The tax is paid annually, and is based on the value of your car that year multiplied by your local property tax rate.
Let's do some math. I live in Wake County, and I drive a vehicle valued at $25,000. $25,000 x my local tax rate (the AVERAGE in Wake being around $1.00 per 100 of valuation)= $250 Personal Property Tax due on my car that year.
I can use the tax figure as a deduction if I itemize.
Has anyone filed for bankruptcy yet? I think not.
If you buy a vehicle within the state of NC, you are not charged sales tax on the purchase, but rather a "Road Use Tax" that is currently 3% of the purchase price.
Let's say my friend and I buy the same car new for $25,000. He lives on Long Island.
His sales tax on the purchase- $25,000 x .0875 = $2,187.50. None of that is deductible.
My sales tax on the purchase- 25,000 x .03 = $750.00. I am $1,437.50 ahead. Now I pay my TAX DEDUCTIBLE personal property tax every year. The first year costs $250. Let's figure that the car depreciates 15% per year.
Year 2 tax-$212.50
Year 3 tax- $175
Year 4 tax- $137.50
Year 5 Tax-$100
Five years have passed, and I am still ahead $562.50 not counting the tax deduction or the opportunity cost of the money I didn't pay in sales tax when I bought the car.
Nobody likes to pay taxes, including me, but I find the reaction to the "Car Tax" to be pretty silly, especially when we are comparing our taxes to New York, New Jersey, Florida, or anywhere else where Real Estate and Sales Taxes are simply INSANE.
Great info and thanks Funky. Every state/commonwealth gets their money one way or another...sounds as if w/NC it may be a bit less and that's nice to know.
BTW, if you're from a state that still has the antiquated no fault laws on the books, you'll also save money moving to NC for not having to deal with that anymore. When we moved from VA to MI we paid close just under $100 extra per month on our car insurance based solely on the no fault law.
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