Buying a car classic car outsdie Texas - TTL questions. (Howe: sales, how much) - (TX) - City-Data Forum

shaxs · 03-09-2010, 02:17 PM

Hi All,

From what I understand Texas charges a tax on vehicles sold. They do not allow you to state what you bought it for, but use some guide for how much the car is worth and that is what is taxed? Is this correct?

So, if I buy a car in say California, do I have to pay tax on it in Texas? If so, how do they value a 46 year old classic car?

derekv · 03-09-2010, 02:28 PM

If it is from a licensed dealer in CA, you can use the sales price to determine tax, if it is a private party sale, you take 80% of the standard presumptive value. However, in your case with a 46 year old car, cars 25 years and older don't use presumptive value. If you have questions:

For any questions about the motor vehicle sales tax, contact the Comptroller’s office toll-free at (800) 252-1382 or e-mail
tax.help@cpa.state.tx.us

shaxs · 03-09-2010, 07:32 PM

Yeah I am looking for a 64 Ford Falcon and I am very close to buying one from a private party. I will call tomorrow and see what they see.

hoffdano · 03-09-2010, 09:40 PM

Is there any good ethical reason you shouldn't pay sales tax on the price you paid for the car? It shouldn't be different whether the car is 0 days old or 46 years.

jaxart · 03-10-2010, 07:46 AM

Quote:

Originally Posted by hoffdano

Is there any good ethical reason you shouldn't pay sales tax on the price you paid for the car? It shouldn't be different whether the car is 0 days old or 46 years.

Ummmm...
There can be a huge difference in what the car sold for new and what it's current worth is as a collector's item if it's in the "classic car" category.

shaxs · 03-10-2010, 08:13 AM

Quote:

Originally Posted by hoffdano

Is there any good ethical reason you shouldn't pay sales tax on the price you paid for the car? It shouldn't be different whether the car is 0 days old or 46 years.

Not sure why I should pay sales tax on a used car that was purchased outside the state. If anything it is owed to the state I purchased it in. I do need to pay title and registration fees.

Regardless of the ethics, I will follow the law. This is what I am trying to figure out. As I understand it, Texas no longer allows you to state what you paid for it. They use presumptive value. I could be wrong and you could show them an invoice. But, my understanding was there was too much "gifting" and fraud that they standardized the system. This is all I am trying to ascertain. I will call the number provided above and see what they see.

hoffdano · 03-10-2010, 08:30 AM

Quote:

Originally Posted by shaxs

Not sure why I should pay sales tax on a used car that was purchased outside the state. If anything it is owed to the state I purchased it in. I do need to pay title and registration fees.

Regardless of the ethics, I will follow the law. This is what I am trying to figure out. As I understand it, Texas no longer allows you to state what you paid for it. They use presumptive value. I could be wrong and you could show them an invoice. But, my understanding was there was too much "gifting" and fraud that they standardized the system. This is all I am trying to ascertain. I will call the number provided above and see what they see.

It is almost universal in the US that sales taxes are paid in the state where the car is first registered after purchase. The only real variation is the rates.

The presumptive value is used to reduce fraud - for example a cash transaction for a $40K car, but the bill of sale says $1000 - to artificially reduce the sales tax.

If the state/county where you pay the sales tax has an unfair value for the vehicle - I assume there is an appeal or argument process. I have no idea how they would value a classic car that probably doesn't have a KBB or NADA value.

shaxs · 03-10-2010, 08:34 AM

Okay called. I was wrong. I thought they used presumptive value regardless of whether or not you had an invoice. If you have an invoice, they will tax you on that.

shaxs · 03-10-2010, 08:41 AM

Quote:

Originally Posted by hoffdano

It is almost universal in the US that sales taxes are paid in the state where the car is first registered after purchase. The only real variation is the rates.

The presumptive value is used to reduce fraud - for example a cash transaction for a $40K car, but the bill of sale says $1000 - to artificially reduce the sales tax.

If the state/county where you pay the sales tax has an unfair value for the vehicle - I assume there is an appeal or argument process. I have no idea how they would value a classic car that probably doesn't have a KBB or NADA value.

Actually it has a NADA value. Sales tax of 6.5% on car sucks. Oh well. Guess I will have to save before I register and drive it.

jaxart · 03-10-2010, 06:05 PM

Quote:

Originally Posted by shaxs

Yeah I am looking for a 64 Ford Falcon and I am very close to buying one from a private party.

Cars over 25 years old are not valued the same as newer ones by the TexMVD. Also, there is some difference when it comes to having the vehicle conform to current inspection standards in order to get it registered in Texas. You pay sales tax where you purchased the vehicle, but pay other fees when registering it in TX. I don't know if the same fee charged a new resident is the same, but there used to be a $90 tax in addition to other registration fees.