Registration Question

"JQJ213- Now With An Extra Cylinder!" (jqj213) 09/26/2014 at 13:56 • Filed to: None

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I have to go register and transfer the title to Vikkie today, now on the title, the seller left the price blank, and said I'd just put a dollar to save on the sales tax (Fl charges 6% on the price of the car). I paid $1700 but don't want to pay that much in taxes. I know people use the $1 a lot but is that ok? Or should I put $500? Thanks for your help.

bob and john > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 13:58

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you can. its ttechnically fraud, but that your choice. if they call the sell and he says yea I sold the car for 1700, then you and him are screwed

Tohru > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 13:59

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In Wisconsin it automatically flags it in the DMV if the purchase price is less than $500.

JQJ213- Now With An Extra Cylinder! > bob and john 09/26/2014 at 13:59

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Thats my fear but he gave me the idea of doing the $1 so...

bob and john > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 14:00

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yea....give him a call and tell him you plan on using his idea, and see if he is still fine with it

JGrabowMSt > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 14:00

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You could probably put $1000 on it. The thing is that if you put the price as too low, the DMV will send you a letter about it, with a form you have to fill out. You'd either pay the sales tax of the difference, or get the seller to sign acknowledging they sold a car for way under it's KBB value (I don't know if they really use KBB, but they'll list a value on the form they think the car is worth).

I don't know if you'll get away with $500, but you might. I didn't list the price I paid for the Magnum, but what I did write was the "rounded" off number to make it simpler. I still paid $0.07 of every dollar which was a very good chunk of change for the car, but had I wrote something lower, I probably would have gotten a letter in the mail about it.

I'd say you should be safe as long as you price it $700 or up. Lower than that might be a red flag.

JQJ213- Now With An Extra Cylinder! > Tohru 09/26/2014 at 14:01

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Its Fl so they really dont care. My friend just got a Jetta from his friend for $1 and he had it for months now with no issues

JQJ213- Now With An Extra Cylinder! > JGrabowMSt 09/26/2014 at 14:02

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I think I might just go with $1000 to be easier,

Will with a W8 races an E30 > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 14:03

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At least in Michigan they can decide the price for you if they don't like the one you write down.

dogisbadob > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 14:03

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If you go in person to a NJ DMV, they'll pull you aside and ask you how much you paid for it.

If they think you're lying about the price, they'll tax you on the book value, which could be more than $1700.

I actually got a couple letters from the tax department (not the DMV) that they think I underpaid and gave me a form to fill out, you could check that the car is in poor condition (and include photos) or some other shit.

My car was dinged up a bit and had 180k at the time I paid $700 for my car, but they thought I should pay tax based on $4900. WTF?

Putting $500 looks less suspicious than $1

Steve in Manhattan > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 14:05

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I'm a lawyer. I don't know how much you'd save, but this sort of behavior is seldom worth it. If you get caught it will cost you far more in fines, I'd imagine. I bought an 88 wagon a long time ago in MD - seller sold it for half of what it was worth and I had a hell of a time proving it to them - took 3 different trips to the DMV. Don't chance it.

Steve in Manhattan > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 14:08

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If my math is correct, you'd save $72.00. Most certainly not worth it.

Doug DeMuro > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 14:10

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The important thing is to coordinate this with the seller. What state do you live in? I've heard of some of the less-than-exciting states (cough Dakotas cough) actually following up with the seller to make sure the buyer isn't lying about the purchase price.

IMO the practice of holding citizens to the honor system for used goods (which have surely already had sales tax paid on them several times by now) is ludicrous, but that's a different topic I guess.

nermal > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 14:20

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I had to deal with this when I bought a used trailer a few years ago, but same concept.

The short version is be honest and be done with it. Not worth hassling over $102 in taxes.

Whatever you do, don't put $1 as the price. The DMV isn't that dumb.

Svend > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 14:31

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So let me get this right. You buy the car privately, then when you register the vehicle you have to declare how much you paid to then pay a percentage of that in tax. Ouch.

Hasn't the tax already been paid on the vehicle at initial first owner purchase and you'v already paid the tax on the money you've earned to pay for the vehicle? Then to have to pay a tax on a private purchase which if you took out a loan to pay for it are also paying interest on the loan.

My butt hurts thinking about this but then you also pay tax on winnings (ie lottery, horse racing, etc...).

sellphones2493 > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 15:30

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I did $1000 when I bought my Volvo in Virginia and had to register it in MD. However, I skipped the MVA (or DMV - whatever you call it), and went to one of those title and tag shops. They charge like $100, but they could give a flying f*** what you fill in, and it saves the hassle of dealing with the state.

JQJ213- Now With An Extra Cylinder! > Svend 09/26/2014 at 19:39

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Exactly! Say I buy the car for $1000. I then tell the DMV I paid $1000 and have to pay them $60 tax (6% tax)

Seems fair, right?

Svend > JQJ213- Now With An Extra Cylinder! 09/26/2014 at 19:56

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It doesn't seem fair at all in any way. As I say the tax on the vehicle has been paid, you've paid tax on the money you've earned to pay for it. The only tax owed is the road or emissions tax (or as it's called here in the U.K. VED, vehicle excise duty based on your CO2 emissions of the vehicle for the forth coming year).

Does the guy/gal at the DMV hold a pistol and wear a mask? They should just so you get your monies worth from the experience.

Seems apt to me.

Jumbojeepman > Svend 09/28/2014 at 02:39

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It's not actually a sales tax in my state. It's a road use tax, paid the first time you register a vehicle in your name. Furthermore, they gave up on people not lying a long time ago. They use the average price from dealers selling the same year, make and model vehicle. So for instance I bought a MB 300E for $1500 a few years ago. The DMV declared it was worth $4500, so that's what I paid tax on. This can work the other way, too. They claimed the 88 F-250 I bought was only worth $1000 and I paid $2200 for it. Fortunately it's only 3% here in NC. There is also an exemption for vehicle transferred between parents and children (in either direction.)

Svend > Jumbojeepman 09/28/2014 at 02:49

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We have an initial registration charge called the Road Fund Licence which is the price of registering a licence plate and then a VED (road tax) depending on your vehicles emissions. We don't have a tax on private sales of a vehicle. Sure at dealerships there is a tax but the tax is worked into the actual cost of the car (ie VAT, Value Added Tax).

It just sounds absurd to have the government charge a tax on a private transaction without getting at least something out of it like a warranty or fraud protection. I just can't get my head round it. I suppose it works for you guys and gals but as a foreigner looking at it, it just doesn't make sense.