Sales tax obligation for private party car sale?

[vroo//M]

Hi,

I'm just wondering if a buyer has any sales tax obligation if buying a car from a private party (non-dealer).

If there is any, what document will prove the sale of the car other then the "bill of sale"?

and what is the legality of having the seller put down "$1" on it rather than the full paid amount to avoid sales tax? (According to DMV clerk, you can't put 0$ unless it's from a parents to their kid).

Does anyone know what the sales tax is for automobile in VA?

Thanks in advance.

[gato]

If you're truly paying $1 it should be fine. If you are actually paying for the car then don't do this (it's tax evasion if you do). If you want to avoid paying some sales tax then give the seller $1000 in cash for the seat covers and have him mark the sale $1000 lower on the form, but don't try and cheat the system too much.

[buttuh]

Putting down $1 is definately going to raise some flags. DMV goes by market price and depending on the condition of the car. Anything way too low for their accepted range is going to get big brothers knocking on your doors.

[jblack]

Bend the law...don't break it... Gato has the right concept.

[smackbelly]

what we normally do is make the bill of sale $2000-5000 cheaper than actual that payment is "under-the-table" and you should be taxed on the remaining balance... why not do a title transfer...

[Filip75]

or find someone who lives in a state, that doesn't have sales tax. Do it, like you sold the car from that state. I know, that something like that can be done. I know I'm going to buy my next car in the state that does not have sales tax.

[vroo//M]

Originally posted by smackbelly
what we normally do is make the bill of sale $2000-5000 cheaper than actual that payment is "under-the-table" and you should be taxed on the remaining balance... why not do a title transfer...

Would I avoid tax if I do title transfer? I thought I would have to do title transfer anyway after the sale? or am I missing some terms here?

[Ali]

No tax on private auto sales in georgia, if you have a relative in another state you could have the title transferred to them and then back to you...

[jblack]

Originally posted by Filip75
or find someone who lives in a state, that doesn't have sales tax. Do it, like you sold the car from that state. I know, that something like that can be done. I know I'm going to buy my next car in the state that does not have sales tax.

That won't work. You pay tax in the spot where you live - depending on what state you live, this could vary by state, county or municipality (It is county based where I live). There are waiting periods to not pay the tax, but, unless you have a residence in a tax free area, you are not going to pull this one off.

[ducky]

The thing about selling to a non-sales tax state is untrue unless the buyer is oging to be registering the car there.

I bought my car from a guy in NH, on the DMV forms I just took off one zero at the end, hasn't raised any flags, and in truth I did give him that amount at the time I picked up the car, the rest was transferred later.

[vroo//M]

Keep in mind that i'm not trying to evade property tax, just sales tax..... :D

[abakos]

Originally posted by jblack
That won't work. You pay tax in the spot where you live - depending on what state you live, this could vary by state, county or municipality (It is county based where I live). There are waiting periods to not pay the tax, but, unless you have a residence in a tax free area, you are not going to pull this one off.

jblack is right-- I bought my E34 from a dealer in PA when I was living in OH, but I was an NY resident at the time. If I registered it in NY, I would have payed NY sales tax. I got my OH residency while I still had the temp tags and paid OH sales tax instead.

Didja get all that? It was a mess of paperwork at the time...

I also know that in Ohio, you have to have someone notorize (sp?) the title, and the amount is on the title. Being that it's between two independent parties, you can fudge it a little. I lucked out because the lady at the DMV in Ohio was stupid and only made me pay tax on a part of the transaction.

[shragon]

Originally posted by jblack
Bend the law...don't break it... Gato has the right concept.

agreed.

[ayton]

just lower the purchase amount by a few on the forms...bend don't break concept just be reasonable with your figures.

[ken_vs_ryu]

the insurance company also will flag your $1 car and insure it as such.

[vroo//M]

Thanks for all the suggestions. Putting $1 on the bill of sale is actually the DMV clerk's idea. She suggested that to me when I transferred the ownership of my sister's car to me.

Apparently u can't "give" the car to family unless you're a parent giving your car to your kid.