Sales tax to transfer out-of-state car registration?? (to buy, DMV)

[jonsoncd]

My vehicle is still registered out of state. I am thinking about finally transferring my license and registration to Texas (I know, I should have done it 90 days of entering the state). But one thing is really bother me. According to the DMV's website, I have to pay sales tax on my car.

I have read this over and over. Can someone who recently moved here confirm this is real?

New to Texas?

This seems completely unfair, I paid for this car and the sales tax in my previous state. What gives Texas the right to collect again? Why don't they ask me to pay sales tax on everything else I own?

[owlman]

You have to pay the difference between Texas's tax and the state you already paid. So if you're coming from, say, New Hampshire, you'll pay the full 6.25%

Why don't you have to pay this for everything you own? Well, ideally you should through the use tax, but they can't really enforce that... with cars it's easy to make you pay through registration.

[OpenD]

Originally Posted by jonsoncd

This seems completely unfair, I paid for this car and the sales tax in my previous state. What gives Texas the right to collect again? Why don't they ask me to pay sales tax on everything else I own?

At least partly it is to protect Texas car dealers. It protects them against people going to states with lower (or no) sales tax to buy cars to bring back to try to save money.

And, well, yes, the state can do whatever they want, subject to State and National Constitutions. And if you don't like the way they do it in Texas, you are quite welcome... even encouraged... to take your self elsewhere. They're quite vocal about that.

[SergeL]

Originally Posted by jonsoncd

My vehicle is still registered out of state. I am thinking about finally transferring my license and registration to Texas (I know, I should have done it 90 days of entering the state). But one thing is really bother me. According to the DMV's website, I have to pay sales tax on my car.

I have read this over and over. Can someone who recently moved here confirm this is real?

New to Texas?

This seems completely unfair, I paid for this car and the sales tax in my previous state. What gives Texas the right to collect again? Why don't they ask me to pay sales tax on everything else I own?

I'll check this out soon. Will do inspection and registration after the closing.

The vehicle sales tax rate in MD is 6%, and in TX is 6.25%, so difference is 0.25%. All my vehicles been purchased 2-3 years ago. So, I'm not sure that even if the difference between tax rates will be applied it will exceed $90.

[10scoachrick]

As Serge mentioned, the difference in tax rates is key:
Sales tax fees on a vehicle can be $90 or the difference between your previous state's sales tax and the Texas sales tax.


When we moved from Georgia, the higher rate there meant no 'new' tax on our vehicles. They will take a seriously close look at any vehicles recently purchased; in case one(not you) might try to s-l-i-d-e something through the system.

Only tangentially related:
Also, as many state do, Texas does not charge sales tax on the value of a traded vehicle when purchasing a vehicle from a dealer. That is, a $20K trade-in toward a $40K vehicle effectively cuts the sales tax in half. Something to consider when selling privately and then making a purchase...essentially, you would need to net 6.25% MORE on a private sale vs a trade-in to get the same 'value'. A considerable amount if high-priced vehicles are involved.

[jonsoncd]

Originally Posted by OpenD

At least partly it is to protect Texas car dealers. It protects them against people going to states with lower (or no) sales tax to buy cars to bring back to try to save money.

And, well, yes, the state can do whatever they want, subject to State and National Constitutions. And if you don't like the way they do it in Texas, you are quite welcome... even encouraged... to take your self elsewhere. They're quite vocal about that.

It's obvious that I'm not trying to scam the system, since I have an out of state license. There is no sale here, the sale is done, that's why I think this is asinine.

[SergeL]

Originally Posted by jonsoncd

It's obvious that I'm not trying to scam the system, since I have an out of state license. There is no sale here, the sale is done, that's why I think this is asinine.

I would assume that if you purchased your car in 2012, then there will be a high probability that they will ask you to pay TX sale tax based on appraised value of your vehicle...

[jonsoncd]

Originally Posted by SergeL

I would assume that if you purchased your car in 2012, then there will be a high probability that they will ask you to pay TX sale tax based on appraised value of your vehicle...

And that's where it gets a little hairy. I actually just swapped cars with my mother 2 months ago, so looking at the title and registration, it appears that I just purchased the car.

The sales tax in my hometown is the same as Texas, but there's no proof of tax payment because it was a family transfer (or in Texas known as a gift)

[SergeL]

Originally Posted by jonsoncd

And that's where it gets a little hairy. I actually just swapped cars with my mother 2 months ago, so looking at the title and registration, it appears that I just purchased the car.

The sales tax in my hometown is the same as Texas, but there's no proof of tax payment because it was a family transfer (or in Texas known as a gift)

Apparently they are not asking for any proof that taxes been paid. I haven't seen on the web site anything that requires you to bring bill of sale, just title and/or registration. They will do simple math. So, I would assume, again, that in your case you have to pay just $90...

[N. Olikee]

Don't really understand your complaint having moved from a state (KY) that charged "property taxes" on a vehicle. CA did this also ........... horribly annoying and expensive. Not only did the state of KY charge a property tax, but they went by a Blue Book value or something like that to come up with the price of the vehicle (which I bought in TX)...........not the price that I paid and had extensive paperwork for............but, their own price which, of course, was more than what I paid.