Buying car in Delaware (sales, home, taxi)

[newmassphd]

Hello,

Asking for a friend. Suppose someone buys a car in Delaware. The issue is the availability of a given used car.

I know that DE has no sales tax but does have a "document fee" of 4.5% of purchase price or NADA book value, whichever is greater.

The state has a policy of making you pay the difference in sales tax you would have paid had you bought the car there.

So is DE's document fee a sales tax or is it strictly something that is not a sales tax?

It would stink to pay the 4.5% then have to turn around and pay the full sales tax in home state.

[nuts2uiam]

I believe that if you reside in another state you will not pay the 4.5% here, but will pay the required sales tax in your titling state.

[chessimprov]

I've tried to do this before. Going to DE, you still have to pay the % of your residence home state is correct.

[newmassphd]

Out of curiosity. Suppose someone who lives in DE bought a car in DE, pays the 4.5% documentation fee.
Then that person moves to a taxing state, say Maryland.

Maryland taxes that car at 6% tax unless the origin state had a state tax rate higher than that of MD. If lower you pay the difference.

So out of curiosity, I was wondering if the 4.5% documentation fee for DE would count in MD and one pays 6%-4.5%= 1.5%
difference to MD or would one pay the 6% to MD because Delaware charged a document fee and not a sales tax.

I am always fascinated by just how thorough state laws and federal laws are when it comes to ways to take your money.

[newmassphd]

By the way, thank you for your responses. So my friend pays his local state tax.