Car purchase out of state (2015, buyer, deductible)

[Newsboy]

I bought a car in SC last year. Because I lived in GA I paid ZERO sales tax in SC, and in fact the check I wrote was EXACTLY the negotiated sticker price minus my down payment.

A couple of weeks later, I got a call from my local tag office in Georgia saying they'd received the paperwork from the delearship in SC. I went in the next day, paid my GA sales tax and received my tag.

This year when my tag was up for renewal, I paid $20 and got the little sticker.

I was not a big fan of the do-away with ad valorem tax at first, but now that I realize I'll never have to pay any more tax on the value of this car, I understand.

[Mishap]

Originally Posted by Newsboy

I bought a car in SC last year. Because I lived in GA I paid ZERO sales tax in SC, and in fact the check I wrote was EXACTLY the negotiated sticker price minus my down payment.

A couple of weeks later, I got a call from my local tag office in Georgia saying they'd received the paperwork from the delearship in SC. I went in the next day, paid my GA sales tax and received my tag.

This year when my tag was up for renewal, I paid $20 and got the little sticker.

I was not a big fan of the do-away with ad valorem tax at first, but now that I realize I'll never have to pay any more tax on the value of this car, I understand.

I don't think that's how it's supposed to work. GA should have required the tax to be collected at the time of purchase on the value of the car or you should have received a bill before getting your tag. You shouldn't be paying sales tax in SC for the car but the fact you paid taxes nowhere isn't kosher.

[PKCorey]

Originally Posted by Mishap

I don't think that's how it's supposed to work. GA should have required the tax to be collected at the time of purchase on the value of the car or you should have received a bill before getting your tag. You shouldn't be paying sales tax in SC for the car but the fact you paid taxes nowhere isn't kosher.

He did pay the tag tax bill before he got his tag, if I'm reading correctly. He just waited for the dealer in SC to send the paperwork to his local tag office. Same procedure that happens here in GA except if he bought from a GA dealer, he could roll the taxes into his financed amount instead of paying out pocket (I know, he paid via check for his car).

[Mishap]

Originally Posted by PKCorey

He did pay the tag tax bill before he got his tag, if I'm reading correctly. He just waited for the dealer in SC to send the paperwork to his local tag office. Same procedure that happens here in GA except if he bought from a GA dealer, he could roll the taxes into his financed amount instead of paying out pocket (I know, he paid via check for his car).

My work addled mind didn't catch the sales tax line. Everything is as it should be. That said apparently this is no longer considered sales tax and is no longer tax deductible much to my chagrin. Definitely benefits those who hold onto their cars for much longer vs. those who change cars frequently (not that it was cheap to do that anyway).

He does say he has a down payment so he didn't finance the tax amount.

[Newsboy]

Originally Posted by Mishap

My work addled mind didn't catch the sales tax line. Everything is as it should be. That said apparently this is no longer considered sales tax and is no longer tax deductible much to my chagrin. Definitely benefits those who hold onto their cars for much longer vs. those who change cars frequently (not that it was cheap to do that anyway).

He does say he has a down payment so he didn't finance the tax amount.

This is correct. For whatever reason, automobiles are the one purchase upon which you pay sales tax based on PLACE OF RESIDENCE, not where you purchase the car. I suppose this is because people would abuse the system and cross state and county lines to make auto purchases, and local governments would never get their fair share of taxes.

Anyway, I purchased this car in March 2013 -- the same month that Georgia did away with the ad valorem tax and replaced it with the one-time sales tax. If I recall, there was some confusion at the SC dealership about how to handle the transaction, but since they do about half their business with Georgia residents, it wasn't a big deal. I have to admit, I was somewhat surprised that there were ZERO taxes and fees for purchasing this car in SC. And then the tax bill I got from Chatham County, GA (where I live) ended up being significantly lower than what the SC dealership predicted. In fact, I double questioned the lady at the tag office to make sure it was correct. She assured me that it was.

As I said before, when I went to renew my tag in March of this year, all I paid was $20 for the decal. It should also be noted that I bought an economy car, used, and not some souped-up luxury model.

Basically, the rule of thumb is, when you go car shopping, be fully aware of the fact that you'll be paying ALL taxes up front on whatever model you decide on. Depending on your taste, this can add just a few hundred dollars to the purchase -- or several thousand.

I do think this new system totally screws people who relocate to the state with NEW cars. But if you're driving a late-model car, your out-of-pocket expenses for transferring a car to Georgia shouldn't be that much. And remember, you'll NEVER pay tax on that car again, as long as you own it in Georgia.

[DaBurgh]

When we GA residents buy the vehicle, do we pay this sales/registration tax as part of the purchase at the dealership or at a later time when we register it at the DMV?

[PKCorey]

Originally Posted by DaBurgh

When we GA residents buy the vehicle, do we pay this sales/registration tax as part of the purchase at the dealership or at a later time when we register it at the DMV?

Part of the purchase, if you are financing. If you are paying cash, you can just wait to pay at the tag office or let the dealer do the paperwork for you.

[Wayr2go]

Sorry to re-ignite this discussion, so is it financially a good idea to buy a car in SC for a new GA resident? i.e. can you save some pennies? If not, why have people gone on to buy one in SC then?

Also, to reconfirm - the tax that one must pay now is a one-off tax determined every year (6.75% for 2014) each time you purchase a car regardless of who your purchase it from - privately or a dealer + registration cost + cost of tags. And then each subsequent year you own that very same car you are paying registration cost + the cost of tags. And if you were to buy another car -again the same transaction as the first time? Correct?

Thank you

[PKCorey]

=Wayr2go;35887497]Sorry to re-ignite this discussion, so is it financially a good idea to buy a car in SC for a new GA resident? i.e. can you save some pennies? If not, why have people gone on to buy one in SC then?

It will depend on the deal. The tax is calculated on new cars on the purchase price. Used cars, I believe, they use the KBB or some other # to come up with Title tax amount and/or the purchase price.

Also, to reconfirm - the tax that one must pay now is a one-off tax determined every year (6.75% for 2014) each time you purchase a car regardless of who your purchase it from - privately or a dealer + registration cost + cost of tags. And then each subsequent year you own that very same car you are paying registration cost + the cost of tags. And if you were to buy another car -again the same transaction as the first time? Correct?

Thank you

No registration cost. Just Tax+cost of tags.

Correct, on your birthday day, you will just pay the $20 for new sticker. No registration cost.

Only thing, you should have to pay is emissions, if you are in the Atlanta area and the tag fee. That's it.

[Wayr2go]

so its just 6.75% of the appropriate price (in 2014) + tags for first time registration ?

Also, how is buying in SC financially beneficial ? Curious to know since apparently SC does not have a sales tax or something. So from my understanding unless you can negoatiate a better sticker price in SC, there makes little sense to buy there and register in GA