kenji4861

There is a person locally selling a TSX /w Navi with 33k miles for $23k. He offered to report a lower selling price to the government for lower tax purpose.

Is there anything I should be aware of? I mean, can I ask him to report that he sold me the car for $5000?..

$23k + tax on $5k = $23410.. which is not bad. Tax in CA is 8.25%

SF_TSX

I belive if you report the selling price too low, the DMV will calculate the tax base on KBB. But I'm not sure.

VeniceBeachTSX

Don't go too far. They do have an idea of the reasonable price range for each vehicle model, given the reported mileage. They allow you some leeway to allow for vehicle condition, but if you're too far off, you could get audited and the penalties will make your savings disappear really fast. So, sure, shave 10-15% off if he is willing to. Maybe pay him the reported amount by check and the rest in cash. Careful though, the state is hungry for money, and if they catch you you'll end up paying their costs and then some.

biker

Anything under the trade-in value might raise a red flag. Don't get too greedy.

dabuda

someone i know did this a few years ago. sold the car for $20k, but on the title he said he sold the car for $10k.

i think dmv or some state dept sent him a letter asking if the car did in fact sell for $10k since the kbb price was $20k at that time. he replied saying he sold to a family friend and that's why it was $10k.

he hasn't heard anything since then...but dunno...YMMV

jlukja

My *cough* friend *cough* did this when he sold his Integra but the difference in the sales and reporting price wasn't too large and the sales price itself ($2800) wouldn't make too much of a difference. :wink:

Alin10123

Wait... you have to pay sales tax even if you buy from a private party? That can't be right...
Hmm... maybe it's different in different states... i figured you needed a state tax ID # in order to collect sales tax... hmm....

moda_way

No, you are not collect sales tax, but you are accounting for the fact that at tax time, you'll be taxed for "other income" like, from the sale of a vehicle.

manavi

The sales tax isn't paid to the seller, it's paid directly to the state at the time the car is registered in the buyer's name.

When you buy a new car and the dealer charges you sales tax and a fee for licensing, those are monies that the dealer is not keeping for themselves. Those are forwarded from the dealer to the state agency to complete the registration of your new vehicle.

Alin10123

Oh i knew about the dealer thing. As in the sales tax gets forwarded to the government. I also knew that if you buy a car out of state, you have to pay sales tax when you register the vehicle. (which i think is total bs).

But even a private party transaction you have to pay sales tax too? dang... that's kind of steep.

Alin10123

Am i correct in assuming that you have to pay sales tax even on a private party sale? Is this the case for Georgia too?