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Car Financing, Car Leasing
#1030 of 1081 Re: Was sales tax paid on full value of vehicle? [albeback]
Apr 02, 2011 (10:09 am)
John and kyfdx both gave good answers, but I will toss in the questions "What state do you live in?" and "What state was the original lease (assume TX)?". I (and most everyone else) lives in a state that charges tax on the payment. So *I* would be afraid if I assumed a TX lease (tax rolled into payment already) that the lease bank would ask me to pay assumed payment + my state's tax. Assume one from another tax on payment state is easier, you would take the base payment they pay (w/o tax) and add your tax to it to get your payment.
In any case, I think full sales tax would be due if you buy the car at lease end. Even if the original lessee paid full tax on it in TX at time of lease.
#1031 of 1081 Re: dealer asking for more $ after 3 months [sweendogy]
by kyfdx HOST
Apr 02, 2011 (11:31 am)
If that's the case, then you are most likely straight with the taxing authorities, and the only issue is between you and the dealer. At least, that simplifies things, and decreases any leverage they might have over you.
Where I live, the neighboring state is only 3 miles away, and that's where I buy/lease most of my cars.. Those dealers are very familiar with transferring titles to the neighboring state, etc.... and, not very likely to make a major mistake on taxation between the states. (basically, I don't pay the tax over there, but in my home state... no credits against tax paid elsewhere).
However, if I were to travel to another state, not contiguous to mine, then those dealers might not be so savvy. I wouldn't automatically assume they are trying to screw you. It's possible they didn't know the exact tax law, or didn't calculate it correctly. It's also possible they assumed you would get a credit for taxes paid in their state, but that isn't so. Or, it's possible they paid tax for you in their state that shouldn't have been paid, at all.
Before I wrote them a check, I'd want to know exactly what was paid, what is still due, and the logic behind it. If they simply miscalculated the tax, and you paid less than what you should have, then you'll probably have to pay it. If they paid tax to the wrong state, assuming reciprocity, when they shouldn't have, then they should get it back, or eat it..
Knowing the two states involved would help..
#1032 of 1081 more info on the issue
Apr 02, 2011 (11:53 am)
thank you all for the suggestions.. I called the dealer today.. they are looking into it.. I went back to look at the paperwork its seems the dealer told the dmv the full price for the car and not the difference in NEW minus Trade-- thus causing the tax problem... the dealer pays the dmv directly and I only paid the difference so that is where the dealer is coming up with the loss.. I paid the correct amount of total taxes but due to dealer error they paid the dmv the incorrect amount and want me now to make up the difference. I guess it also does not help that the dealer and my DMV are in 2 different state bought car in NY and registered in MA.
#1033 of 1081 Re: more info on the issue [sweendogy]
Apr 02, 2011 (12:59 pm)
Even though the dealer paid MA for your tax, they can't get a refund if they overpaid since it is in your name. Look on your registration it should show the amount paid to title and register the car. That should be too high by the amount of ((new - trade) * MA tax rate) and should also the same amount the dealer is asking about. If this is correct, then you could take your paperwork to the DMV along with your registration and show them the error and apply for a refund of the over payment. If you get it, then it is up to you if you want to return it to the dealer. I would, but I would have them pay me for the trouble to fix their mistake.
Looks like MA tax is 6.25%? o your trade was worth $16k?
#1034 of 1081 Re: more info on the issue [dwynne]
Apr 02, 2011 (1:17 pm)
you are correct that the amount they are asking for is the difference from the amount of tax they charged me (diff between new car and trade in) from the actual amount they paid the dmv.
onto the DMV, if i get it..what if i dont get it? I dont believe it should be on me to go to the DMV and figure out a dealer mistake-but to get this off my plate I would do it....and have no problem paying the correct tax (thats to you uncle sam) but double tax is a joke and the dealer should of figured this out-- its been over 3 months..
#1035 of 1081 Re: more info on the issue [sweendogy]
Apr 02, 2011 (1:52 pm)
unless I am missing something, it sounds 100% like a dealer error, and there issue is with the DMV, not with you. so if they want a refund, then need to get it from the state (good luck with that!)
If you paid the correct amount in the first place, you should be out of the picture.
say they screwed up and paid too much to pay off your trade. Should you be on the hook to mkae up the error, or the finance company? Same situation here.
I would write a nice letter, documenting the numbers, and politely tell them to take up their problem with the DMV. Or take it out of the paycheck of whichever clerk screwed up in the first place.
#1036 of 1081 One thought
by kyfdx HOST
Apr 03, 2011 (10:40 am)
Since you traded the car out-of-state, you may not be eligible for the reduction for trade-in. I don't know MA tax rules, but that would be the case in my state..
#1037 of 1081 Re: more info on the issue [sweendogy]
Apr 04, 2011 (11:09 am)
If show the DMV that the tax was overpayed on your behalf they should give you a refund. if they don't, ask them to docment wyhy not and pass a copy along to the dealer (keep original for yourself) and tell them you tried. If you get the money, ask the dealer to repay you for your time and trouble on their mistake.
#1038 of 1081 Re: One thought [kyfdx]
Apr 04, 2011 (11:11 am)
I have not heard of that before. I am not sure if it matters here, but it could matter to MA and they paid the correct out (but charged the buyer too little).
#1039 of 1081 Re: more info on the issue [dwynne]
Apr 04, 2011 (11:55 am)
Buying a vehicle in outside of your state of residence can be a nightmare! There are 50 states and (at least) 50 specific sales tax laws regarding sales to non-residents.
Most of the laws are NOT in favor of the non-resident buyer! They want to collect their tax up front and, if you're lucky, you may get credit for some/all of it in another state??? Very confusing to say the least!
I'm a Georgia resident but I have purchased my last two cars from a new car dealer in Tennessee. TN makes it easy- if a non-resident purchases a vehicle and will be removing it from the state within three days, the dealer collects $0 sales tax. Then it's all up to the buyer and the state where he registers it. In my case, I had to visit the regional Georgia DOR office with my Bill of Sale showing the NET price. The county I live pays 6% sales tax, so I had to pay 6% of the net vehicle price!
I had no trade, just some intense negotiating and a coupon from Mazda for $500 off the best deal I could negotiate. The bottom line (NET) total ended up at $16,250, so the 6% tax was $975. I wrote the DOR a check for $975 and they gave me a receipt so I could a get a new tag and register the car....
It was easy with TN and GA, but most state-to-state sales can be a major pain! Go