...do you pay tax?


sorry, I know it's a dumb question... but I've never bought a car from a private party before, nor have I ever purchased a used car before for that matter...

 

Yes, you do. You do not pay him the tax. But when you go to the DMV to register the car, they will hit you up the taxes.

They go based on the bill os sale that you make up. For me, what I did was type up a letter stating the name of the seller, buyer, sale price, car info and date. I had it notarized. You can choose to put down a lower sale price, so the sales tax will be lower.

 

 

were you the seller or the buyer?

 

Not if you live in one of the few states that doesnt have sales tax.

 

or yeah, OR.... where else? NV?

 

I was the buyer.

You really don't need anything super formal for a bill of sale.

Something like this below will work....

 

DE.

 

so, suppose I buy a used car from a private party and the car's registration is good through October.... would I pay the tax then... or right away?

 

This isn't always the case, I bought a car for about 20% of what it was actually worth while I was in college, and the DMV charged me tax for the value of the car, not what I paid for it. Jerks.

 

This depends on the state. For IL, you simply tell them what year and how much you paid. Then pay tax on a flat rate type of system. You don't want to report a ridiculously low amount, just something close to it's value.....

Here is IL as an example:


http://www.revenue.state.il.us/taxfo...50taxchart.pdf

 

In texas I say how much I paid. They will be changing it to reference KBB.

 

Pay tax on it right away. I bought a car from someone, went to the DMV to change registration, and they asked me for the money. Just put a low sale price on it to save a couple hundred dollars. This was also in CA.

 

Thats a stupid idea. Doesn't take into account the relationship between the parties. If someone is insolvent and needs money, they might get rid of a car for cheap. That reference to KBB would seem to punish the buyer for getting a good deal.

 

I had that happen also, but at least in FL if I showed proof like a bill of sale they let it go for the sale price.
Usually they only gripe if the $ is way out. Like a Z06 vette for 10K.

 

Unfortunatley that's just the way it is in Texas now. but they charge you 20% of the pre-assesed value. We don't have a state income tax though, and they are trying to find ways to bring our property taxes down (actually they are bringing down school taxes -a huge portion of our property taxes- and finding better and fair ways to fund schools).

 

ISEater you're also in CA like me. what other ppl said is correct. u just pay the seller whatever purchase price u agree upon and when u go to the DMV u will pay your county rate tax based on the price u show them u paid for the car.

when the car's registration expires in october the DMV will mail you a renewal bill.

 

No. When you go to the DMV to do all the paper work for the transfer of ownership, you will have to pay the taxes.

 

if the dmv gives you any hassles about a low price, tell them the seller is your brother-in-law. thus explaining the low price point. worked for me in college in palo alto. paid 5500 for a used rx-7 and the seller documented on the receipt that the price was 4000. i mean don't go mental and have a receipt with a ridiculously low price point. something reasonable will do.