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Old 08-05-2007, 12:54 AM   #1
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Slightly OT: Used Boxster sales tax in LA, CA

Do I have to pay sales tax when I buy a used Boxster from a private seller?

I'm new to LA so I have no idea, I seem to get varying answers from people I ask.

A guy at a used car lot said I would have to pay sales tax to the DMV even if I buy from a private seller. I'm not sure how credible this information is coming from him since have to pay sales tax (about 8% right?) if I buy from a dealer.

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Old 08-05-2007, 09:12 AM   #2
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DMV is going to want sales tax no matter whom you buy a car from.
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Old 08-05-2007, 09:30 AM   #3
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Usually, the way it works is that you pay the sales tax when you register the vehicle, or transfer the title.

You will need a bill of sale from the person you're buying the car from. You can fudge it a little by having him put a lower amount... but don't go overboard, because it might be suspicious.

Texas actually passed a law that sucks - that you have to pay taxes based on what the state thinks the car is worth, even if you paid much less than that.
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Old 08-05-2007, 10:03 AM   #4
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I just transfered the title of another car to my name a few months ago and to my surprise, the DMV didn't charge me a cent or even ask how much I got the car for. I guess they've abolished the taxes for second hand cars when you buy from a private seller? Actually makes sense if they did because if you were to pay taxes again then wouldn't that mean that you would be doubled taxed on let's say a used car?
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Old 08-05-2007, 10:15 AM   #5
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You will be charged a "use tax." It is based on whatever the sale amount on the bill of sale says. It is collected upon vehicle registration. As others have said, you can fudge it a bit, but don't get too greedy.

The tax assessed it that of the county in which the car is registered. If you have multiple addresses, you can save up to a bit on the tax by registering it at the address with the lower sales tax rate.

It is a bit absurd, but yes, in essence tax is being collected twice on the vehicle. Perhaps that's why they call it a "use tax" rather than sales tax.

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Old 08-05-2007, 10:18 AM   #6
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The DMV doesn't call it 'sales tax' they call it 'use tax' but it's the same thing. 8.75%+ or whatever your local sales tax rate is.

You can often negotiate with the seller to write down a lower number to save you some money. yea, it's illegal.

When I bought my box, I paid very little for it as far as the DMV paper work goes. Then I turned right around and bought the hard top, floor mats and and bunch of other stuff from the previous owner at really inflated prices. The letter of the law was not violated, but the spirit of the law was tromped all over. Fortunately I bought it from a lawyer who didn't give a crap about the spirit of the law, just like me.
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Old 08-05-2007, 04:08 PM   #7
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Thanks for the replies.

So basically, if I buy a $20K Boxster, then I'd have to pay another $1700 of this "use tax" to the DMV?

jmabasa, so you did not have to pay any tax at all when you registered the car under your name? Are you in CA?

kelly1005, how much is "very little"? So you did not pay the 8%+ tax?

My budget for the car is about $22k, if I'm gonna have to pay some kind of tax at about 8%, then that leaves $20k for the car. If there is no tax, the entire $22k can be alotted to the car alone.
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Old 08-05-2007, 07:41 PM   #8
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Yes, if you pay $20k for the boxster expect to give the state $1700 plus a few fees they tack on because they can.

I paid him 75% of the price we agreed upon for the car, and paid him 25% of the price we agreed upon for the 'accessories' as a separate purchase. The state still got their money on most of the deal. I shouldn't have said 'very little'.

You're going to have to allocate money for taxes, I don't know anyway around it. It's part of the price of admission.


Quote:
Originally Posted by tracke30m3
Thanks for the replies.

So basically, if I buy a $20K Boxster, then I'd have to pay another $1700 of this "use tax" to the DMV?

jmabasa, so you did not have to pay any tax at all when you registered the car under your name? Are you in CA?

kelly1005, how much is "very little"? So you did not pay the 8%+ tax?

My budget for the car is about $22k, if I'm gonna have to pay some kind of tax at about 8%, then that leaves $20k for the car. If there is no tax, the entire $22k can be alotted to the car alone.
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Old 08-05-2007, 10:08 PM   #9
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Thanks.
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