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Old 03-28-2007, 04:26 PM   #1
04RSVR
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Used Vehicle Tax loop-hole

As it stands as of Oct 1 2006, it you buy a used vehicle you have to pay sales tax based on the market value of that vehicle as determined by the Texas DMV.

I think this is BS!! If person A buys a vehicle, he pays tax on it at the sale. If I buy it from him the next day the state of TX collects tax AGAIN!

UNLESS!!!!

If a vehicle is "given as a GIFT" to a friend or relative, you check "$10 gift tax" on the transfer of license document and that is the fee paid.

go here:
http://www.dot.state.tx.us/frequentl...stions/vtr.htm
and look at the last FAQ under Titles


Q: What steps should I follow to give a vehicle as a gift to a friend or relative?
A:
Please give the recipient your (signed) negotiable title and request that the recipient complete a title application [pdf, 2 pages, 113kb], which must be provided to their county tax office.
On the title application, the recipient should check the "$10 Gift Tax" box found in Section 21. The recipient will have to provide proof of auto insurance at the county tax office to register the vehicle.

And there you have it. I'm sure you can figure out how to make this work if you are buying a bike. My advise, don't put "for motorcycle" on the check!

Mike
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Old 03-28-2007, 04:33 PM   #2
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Quote:
Originally Posted by 04RSVR
As it stands as of Oct 1 2006, it you buy a used vehicle you have to pay sales tax based on the market value of that vehicle as determined by the Texas DMV.

I think this is BS!! If person A buys a vehicle, he pays tax on it at the sale. If I buy it from him the next day the state of TX collects tax AGAIN!

UNLESS!!!!

If a vehicle is "given as a GIFT" to a friend or relative, you check "$10 gift tax" on the transfer of license document and that is the fee paid.

go here:
http://www.dot.state.tx.us/frequentl...stions/vtr.htm
and look at the last FAQ under Titles


Q: What steps should I follow to give a vehicle as a gift to a friend or relative?
A:
Please give the recipient your (signed) negotiable title and request that the recipient complete a title application [pdf, 2 pages, 113kb], which must be provided to their county tax office.
On the title application, the recipient should check the "$10 Gift Tax" box found in Section 21. The recipient will have to provide proof of auto insurance at the county tax office to register the vehicle.

And there you have it. I'm sure you can figure out how to make this work if you are buying a bike. My advise, don't put "for motorcycle" on the check!

Mike
You can also leave the title open. If you buy a used car, have the seller sign the front and back of the title, but YOU YOURSELF DON'T FILL IN THE BACK AND SIGN IT. Only problem then becomes when the registration comes due, you have to pay tax and register it or sell it and make the buyer pay tax and register it.

And this whole market value thing is BS. I just transferred the title on my '90 Mustang when I sold it a month or so ago and put on their I paid $800. They didn't question it one bit. Now if you go in there saying you paid $800 for a 2006 BMW or Lexus they might say something, just make it reasonable.
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Old 03-28-2007, 04:46 PM   #3
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Quote:
Originally Posted by issanni
You can also leave the title open. If you buy a used car, have the seller sign the front and back of the title, but YOU YOURSELF DON'T FILL IN THE BACK AND SIGN IT. Only problem then becomes when the registration comes due, you have to pay tax and register it or sell it and make the buyer pay tax and register it.

And this whole market value thing is BS. I just transferred the title on my '90 Mustang when I sold it a month or so ago and put on their I paid $800. They didn't question it one bit. Now if you go in there saying you paid $800 for a 2006 BMW or Lexus they might say something, just make it reasonable.

Umm, yeah. With the gift thing you can register the vehicle in your name, that's the whole point.

You can say it's BS if you want, I'm just going by what the State website says and what they told me at the tax assesors office. They put the VIN in an automated system to find the value. You can put 1 dollar or 1,000,000 it won't matter. It could be that a 1990 mustang has a market value of close to $800.
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Old 03-28-2007, 06:29 PM   #4
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Quote:
Originally Posted by 04RSVR
Umm, yeah. With the gift thing you can register the vehicle in your name, that's the whole point.

You can say it's BS if you want, I'm just going by what the State website says and what they told me at the tax assesors office. They put the VIN in an automated system to find the value. You can put 1 dollar or 1,000,000 it won't matter. It could be that a 1990 mustang has a market value of close to $800.

Actually a 90 Mustang GT has a market value around $3000. Maybe it's a Harris County thing, cause I did mine in Montgomery County.

Be carefull with that whole gift thing too, cause if they find out you "played" the system the will come after you to collect the tax and penalties.
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Old 03-28-2007, 06:35 PM   #5
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Old 03-28-2007, 11:10 PM   #6
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This is what they use unless it was a "gift"

You just put the vin in and it says what you are paying taxes on LOL

http://www.dot.state.tx.us/services/...tive_value.htm
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Old 03-28-2007, 11:18 PM   #7
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Felony charges vs. couple of hundred dollars, hmmm. I pay my taxes.
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Old 03-29-2007, 12:01 AM   #8
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the gift tax thing only works if the other party agrees on saying it, like if you bought from a friend or something. and paid in cash. (basically, don't leave paper trails) and if for some reason they question the seller, and they said "gift?, i sold that vehicle for X amount of dollars", then it will be a criminal offense.

what you CAN do is......go to this website...Presumptive Value...check the value of vehicle....and calculate 81% of that, and write that down as how much you paid. if you go under 80% of the value it's worth, they will charge you their "presumptive value" tax
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Old 03-29-2007, 12:03 AM   #9
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Right. I understand you need to make sure the seller agrees with the story.
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Old 03-29-2007, 12:07 AM   #10
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i deal with a lot of title transfering, the only people that can get away with tax prices are dealers. the "presumptive value" tax only applies to individual sales.

and it sucks because I don't keep vehicles very long, and I keep buying more....I hate to keep transfering stuff in my name when I don't plan on keeping it long, but i've also had problems selling vehicles with titles not in my name. some people worry too much i guess and want the title under my name before i sell them the vehicle
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Old 03-29-2007, 05:35 AM   #11
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i tried a bill of sale last month....didnt work

i had to pay taxes based on $4400 for my 2003 gsxr 600

to disput it you can have an apprasial done thru an insurance company most charge $100 or so........just another way for uncle sam to to bang your rump
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Old 03-29-2007, 09:35 AM   #12
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Quote:
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Felony charges vs. couple of hundred dollars, hmmm. I pay my taxes.
+1 Isn't there an ethical issue too? :confused1

I don't want to pay $600 to register my 950 but it goes with the deal I guess.
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Old 03-29-2007, 10:15 AM   #13
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Bunch of cheap Bas---ds, I'd do the same thing, done the same thing, never been questioned about it ever. Say nit is wrecked, water damaged whaterver, they are not coming to look at it ever.
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Old 03-29-2007, 10:27 AM   #14
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Bunch of cheap Bas---ds, I'd do the same thing, done the same thing, never been questioned about it ever. Say nit is wrecked, water damaged whaterver, they are not coming to look at it ever.

tried that...no deal...wuz told to have it appraised to waive thier fees or pay the tax..........its alot harder now than you think...also had to have proof of insurance prior to title transfer.......wtf????
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Old 03-29-2007, 01:22 PM   #15
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I got all of you beat on that. THe tax thing doesn't worry me. I never have to pay tax on my vehicles. Disability has its privileges.neener
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Old 03-29-2007, 01:34 PM   #16
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I think the state needs to review their ethics as well! I mean how many times do they really think they should be allowed to tax a vehicle?
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