I live in Ohio and recently bought a 65 Mercury Montclair so today I got a letter from the state saying its worth 8568.00 and owed them another 613.22 for sales tax,I have gotten letters from the state inquiring what I payed for them in the past but this is the first where they had a figure on what they think its worth. I could see this if its a 3 or 4 year old car but not one 55 years old and sitting since 1977,anyone else in Ohio ever get a letter like this.
I’ve always gone into register a vehicle with a sales receipt from the seller. Pictures if necessary. I’ve even used a few of the registers like Hemmings to show value with the different condition value numbers. Not in Ohio but I can’t see any difference.
Minnesota has done that for years. Even if you have a receipt they look in “the book” to get the value. It’s not what you paid it’s how can the state take more money out of your pocket.
They just charge you sales tax on what you pay here in Bama. Most non runners I’ve bought only cost $100, no matter what I paid for them. A few runners, too....
It looks like someone in the tax department has been watching too many of those car auctions,not all old cars are worth a bunch of money and would like to know where they got that 8500 figure.
They hit you with the "assumed" value per some price guide book. here in Washington too if you don't have a good bill of sale when you go in. They have been doing that since the 70's as they hit me with what they thought my 48 was worth when I brought it up from Texas in `1977 and not what I thought it was worth. They actually taxed me for more than everything I had in it including buying it, the engine swap and wheels and tires. Even on later model work beaters they can want outlandish sales tax just because of what model the rig is rather than the actual condition it is in and what you actually paid.
Here in Ohio they just ask you what you paid when you get the title done and that was it,this car I was more honest then in the past and they send me that letter.
Government fund raising. Pennsylvania has been doing that for years. When they send the letter you need to show them somehow why it was cheap. A copy of the bill of sale the best way. It needs car vin number. It helps if there is a description of why it was cheap, needs engine, wrecked, ect. I would guess your state is looking for same things.
They used to have you mention the condition when you got the title but did not ask this time,this is new and the only other time I had to say what I payed is when a car I sold eventually went through a dealer and then everyone else who ever else owned that car got a letter from the state.
Illinois Department of Revenue tried that gambit for some time a few years ago. It happened to me when I bought a ‘49 Olds convertible. I replied with a scathing letter, included photos and offer to deliver it to them in 24 hours if they would give me a check for the value they had arbitrarily assessed it to be worth. Never heard another word from them It also happened to several of my local car guys that I was acquainted with. They responded with evidence of the actual condition....i.e. photos and appraisals, and the claims by the State were dropped. The offensive part of this deal wasn’t that they had doubts about the valuation, but that instead of requesting further proof of the claimed value, they just applied some spurious high book value and demanded payment based on that figure. However, it is part of the State tax code that the State can assess taxes based on the true value of such property no matter what the buyer claims was paid, or in some cases may have actually paid (“sweetheart deal”). Given the fact that the public is often dishonest about those transactions to avoid lawful taxes, it should not be surprising that the State would attempt to put a stop to it. None of my-comment above should be construed to mean I agree with the taxes imposed on used vehicles. That is a separate matter. Only that so long as the tax laws exist citizens are obligated to comply with the laws as written. So, IMO, you best course if action is to challenge the State’s assessment with supporting documentation of your claimed value. Ray
In Kansas they charge sales tax on what you paid for the car and the form is on line, I keep several of them around. Pre 49 cars fall under different rules in Kansas as far as title requirements but think sales tax is the same.
Wow...I hope this isn’t the start of something in more states as well. Oklahoma didn’t even charge tax on used vehicles until just a few years ago. They sold that to the citizens as a reduction in per-year tag costs mostly on newer vehicles. It greatly reduced new car tag costs but added the tax to used car sales which I am sure more than made up the difference in the savings... That is when most old cars started being purchased for $100 in Oklahoma. I have tried to be honest even though I hate paying tax on actual purchase price considering how old some of these cars are. They do have values they assign for newer cars but haven’t gotten there on old cars yet. I see it coming though as we all know you can’t buy a 32 Ford coupe for $100 no matter the condition these days...as an example. Sounds like there are ways to substantiate the actual purchase price though in this case possibly.
It's just the tip of the ice burg,Here in Hellinois where we live we have a RAIN tax,no bs,they measured the permeable ground of your property ,came up with a formula and added a rain tax to the sewer bill to help fund something they could not get by the people.Rant over.
WV will do that to unless you have a notarized bill of sale for the actual price paid. If you do not have one or it is not notarized you will pay what NADA or one of those sites says it is worth. Pictures will not work, parts receipts will not work just a notarized bill of sale.
Thing that gets me, is if I buy a used car for a 1000 bucks, I have to pay the sales tax. The seller is supposed to claim that 1000 as income. He/ she is supposed to pay the tax. If I sell it for a 1000, the buyer has to pay the tax, and I am supposed to claim the money as income WTF? Taxes being paid are way more than the cost of the car after years have passed Ok, sorry for getting political
More states than not are getting that way. Part of the problem caused by states trying to snag every tax dollar they can. Part of it caused by guys who actually buy finished show quality cars and then claim a low ball barely a running beater purchase price. Then here we come having bought a rig at an honest price and get dinged because their "book" says it is worth four times what we actually paid. Documentation is everything. Take the time and spend the money to do a Notarized bill of sale on anything that might be construed to be worth far more than you paid for it. Save those crappy out of focus photos that the seller posted on the net with the junk sitting around it. Take your own the day you picked it up exactly were it sat when you went to get it and had to dig it out of 15 years worth of garage clutter. Save and print the add that you found it with. I did that with my OT daily that I bought for about 3K less than the going price for a clean driver off the car lot because the add had the price and stated the condition. I did have to do repairs before I drove it.
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