Adam_W

Does anyone know:

I am in California: if I buy a "used" corvette i.e. >7500 miles, either out of state or in-state, from a PRIVATE PARTY, is the "use tax" that I pay to the DMV the same amount as the sales tax of buying the same used car from a dealer?

How about buying a "new" corvette, i.e. <7500 miles, from a Private Party?

If the difference in amount of the sales tax vs. "use tax" is significant, it might make me avoid buying from a dealer and stick to buying from private sellers.

thanks.

Bill Dearborn

Most states do not differentiate as that would cost them money and would get dealers upset.

Bill

edcologne

same tax, private or dealer.

just not sure if location of dealer (in CA) or your place of residency (in CA) determines the exact percentage as that number differs from city to city, pretty close though.

at least you ca write off taxes paid on "big ticket" items w your next income tax, takes off a little edge.

Adam_W

Really? Do you know what category that tax deduction falls under?

edcologne

guess the proper answer would be "please consult your tax adviser".

frankly i don't recall exactly where that comes up in the tax program i do but it definetely does and is correct, all assuming you do pay ordinary income taxes.

but remember, "writing off" only means that you don't pay income tax on that amount, so you still pay the majority of it for the beautiful streets you can drive on

boraxman

Yes what ever sales tax is in your area...new and used, in or out of state purchase, Kali wants its money/

Corvettinator

Yep, I hate Cali. Rape/use tax cost me over $5K on my '11 GS I bought out of state. At least you are in OC, so less tax than those idiots in LA County.

Jawnathin

Not sure what you guys are talking about, but when I bought my car about 18 months ago, it was an out of state car, private party, more than 7500 miles, and all I paid was registration and sales tax of the purchase price of the car. I am also in California.

Never heard of a use tax.

boraxman

http://www.boe.ca.gov/sutax/faqtrans.htm



What is the difference between sales tax and use tax?
In California, transfers of tangible personal property for a consideration (sales and purchases) are subject to sales tax or use tax unless the law provides an exception (that is, an exemption or exclusion). Although the rates are generally the same, sales tax is imposed on the retailer for the privilege of selling tangible personal property in this state. The retailer may collect reimbursement from their customer if the contract of sale so provides. Although this is usually invoiced as "sales tax," it is actually sales tax reimbursement. Whether or not the retailer collects reimbursement, the retailer is liable for the tax due.

Use tax is generally imposed on the purchaser of tangible personal property that is used, consumed, or stored in this state. Sales of vehicles, vessels, and aircraft by licensed dealers are usually subject to sales tax, for which sales tax reimbursement is collected at the time of purchase. Use tax applies to the cost of vehicles, vessels, and aircraft purchased from non-dealers (for example, private parties) or from outside California for use in this state. Use tax also applies to most leases of tangible personal property. Private party sales or brokered transactions are normally subject to use tax. If the first use of the property occurs in California, use tax may apply even if the purchaser is not a resident of the state. The sales and use tax are "mutually exclusive," which means that either sales tax or use tax applies to a single transaction, but not both.

09Z06pj

What you paid to DMV on top of the registration fees for your used car is called a "use tax."

GARYFINN

If you can buy from a private party do so !! that way you can name your own buying price and save yourself some cash.

boraxman

Got to be careful on that one, State Board of Equalization can and will come after you if you claim an unrealistic purchase price...Ask me how I know...

MelAnn

In Texas, people used to buy vehicles for "$1 and other considerations". "Other considerations" being more money under the table.
Years ago the state got wise to this practice and now if your purchase price looks unreasonable, the state will look up the fair market value of the vehicle and tax you on that amount.

Of course if you can show that the vehicle is wrecked, undriveable, a project car, etc, then you will have some recourse. Otherwise be very careful.