SALES TAX question

thats right, paying tax on the net sales price (new car - trade) is only available at dealerships to my knowledge.

 

Varies state by state.

In Florida, you lose the benefit of the sales tax on trade if you do 2 separate transactions. In Florida, when you trade, you only pay sales tax on the difference, not the entire amount.

If you can find a buyer for your car, and run it through the dealer (they may charge $200-$500 for doing the paperwork, although if it is a tough deal they may do it for nothing just to sell the car to you), then you can get the benefit of the sales tax on trade, and the dealer "flips" your car at the same time to the new buyer.

If you are doing 2 separate deals, then you still may come out even or ahead, depending on what the car sells for versus what the dealer will give you on trade. But it takes more time and effort.

Regards,
Jerry

 

Not in California.

You buy a new car, add 9.5% of the full value as sales tax, minus the trade in value of your car. You pay the full tax value.

 

Smart question about taxes, you're thinking ahead which is good.

If you contact the sponsor here, Roy Cats, then he is a friendly dealer which can make this happen for you by processing both transactions to offset your tax liability.
Not sure where your deal would be done but many states have different laws which might limit things but Roy is an easy person to contact and talk to so you may find your options.


http://www.ferrarichat.com/forum/cats-exotics/

 

some states allow for sales tax credit on private sales...

 

What if you put in a lower seller price on the title - say $10,000; and get a bill of sale for proof of purchase.

As far as I know, you can buy/sell anything at any price you want, ay ay?

 

Not in Texas where used cars sales taxes are based on blue book values and not what the ill of sales says.

This is very specific to each state.

 

If we ignore the legality of this -- CA will honor the bill of sale BUT the number can't be too far off reality. If it is, they will charge tax on the blue book value. There is probably a fixed percentage but I don't know what that is off the top of my head.

 

Ethics aside...North of 100k, it starts to make some sense to have an out-of-state contact and an expired license. For the folks exchanging $1M+ cars, I can't imagine they're paying nearly 10% every time. An incredible amount of GDP is spent on tax avoidance, and it should be no different on a personal level if you are a car nut. There is also incorporation...I seem to run into a lot of exotic owners who register their car as the business car outside of their home state. Talk with your accountant The tax man is lenient, but you better jump through his hoops.

 

If you purchase a car in South Carolina, you pay 5% of the sales price or $300, whichever is less. One of the great things about South Carolina.

 

But you pay property tax on it annually for as long as you own it. It really adds up over the years. I would rather pay full sales tax if I planned on keeping it for a while, like we do in FL. Short term this may be the best way.

Property tax on my last Porsche was over $900 per year in SC.

 

Yeah, you're missing a couple of things. Here in Italy, for example, there is a very steep automobile transfer tax when you buy a used car. It's not IVA but it takes a big bite anyway. New cars are subject to IVA and I think it's 21%.

Then there is the annual automobile tax you must pay and, if you have a car with any power at all, you have the pleasure of paying the "super bolo". This is a tax on excess horsepower and it's not a one time "gas guzzler tax"; we get to pay it every year. It depends on the power and age of the car, but for brand new ultra super cars it is over $10,000 per year. So you can see, that buying a car, holding it for a short time, and then flipping it is far from cheap for private individuals, at least in Italy.

 

I'm not an expert on French car registration, but they also have a registration tax based on taxable horsepower, CV. The formula was originally based on steam engines so, as you might imagine, only a few people really understand how it works and I'm certainly not one of them. Hint, the famous Citroen 2CV had two taxable hp (hence the name) which is certainly less than the actual power but if you've ever driven one, maybe not by all that much.

Anyway, a little looking around shows that powerful cars which also pump out quite a bit of CO2, like a Ferrari, would cost you two or three thousand Euros to register in France. So, once again, even though you don't have to pay VAT (or IVA), a private individual is going to pay a significant amount of some kind of tax money just to become the new owner.

There may be some place a private individual can buy, change ownership documents, and subsequently flip used cars for next to nothing, but I don't know where that might be.