Woodalls Open Roads Forum: Pay tax on MSRP or actual sale price?
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 > Pay tax on MSRP or actual sale price?

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CHBurris

Kansas

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Posted: 04/11/14 08:35pm Link  |  Quote  |  Print  |  Notify Moderator

We bought a new Fuzion a couple weeks ago in Colorado. Just got the title in the mail, and noticed that the price listed was the inflated MSRP, which was $50,000 more than we paid. So, we're sitting here wondering....surely we do not pay taxes on MSRP.?

romore

Canada

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Posted: 04/11/14 08:39pm Link  |  Quote  |  Print  |  Notify Moderator

That might be for insurance and property tax reasons. You pay purchase tax on the invoice amount.

wbwood

Mooresville/Troutman, NC area

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Posted: 04/11/14 08:42pm Link  |  Quote  |  Print  |  Notify Moderator

No. You pay on the sale price. But because the title listed it at a higher price doesn't meant the state or county is going to tax you at that rate. They will deem a value on it and tax you from that. Could be close to the msrp, depends on what they deem it at. But shouldn't have anything to do with the title.


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The Texan

Cascade, Idaho

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Posted: 04/11/14 08:44pm Link  |  Quote  |  Print  |  Notify Moderator

That is fraud on the dealers part, probably to satisfy "his" floorplan. I would call him and tell him that unless you receive a sales contract with the TRUE sale price, or a check made out to your state for the taxable amount on the $50K, you will file a complaint with his Attorney General and the CO DMV for fraud. His business license is worth more than the dollar amount of fraud he committed, so keep the pressure on him. I hate sleaze ball dealers that try this type of BS....

In our state the DMV requires sales tax be paid on the amount filled in on the title, so if KS is the same, yes you are going to pay on MSRP.


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CHBurris

Kansas

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Posted: 04/11/14 08:48pm Link  |  Quote  |  Print  |  Notify Moderator

Okay, good! Was starting to stress just a bit. Thank you!

MrVan

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Posted: 04/11/14 08:49pm Link  |  Quote  |  Print  |  Notify Moderator

CHBurris wrote:

We bought a new Fuzion a couple weeks ago in Colorado. Just got the title in the mail, and noticed that the price listed was the inflated MSRP, which was $50,000 more than we paid. So, we're sitting here wondering....surely we do not pay taxes on MSRP.?

$50,000???

Golden_HVAC

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Posted: 04/11/14 09:53pm Link  |  Quote  |  Print  |  Notify Moderator

wbwood wrote:

No. You pay on the sale price. But because the title listed it at a higher price doesn't meant the state or county is going to tax you at that rate. They will deem a value on it and tax you from that. Could be close to the msrp, depends on what they deem it at. But shouldn't have anything to do with the title.



I would say that you "Should" pay the tax based on the sales price. However you never know what the local state or county government will base it on.

I have to agree that the "MSRP" is inflated, and rarely does anyone walk into a car dealership anymore and say "Well if Ford or Honda says it should sell for $35,650, I will not pay a penny less for that vehicle". Most know to ask for a discount, even governments buy cars for their fleets at a huge discount from the MSRP that the same vehicle might sell to the public for.

In California, if you buy a cell phone and the "Sale Price before rebate" is say $300 and you have a $299 rebate for staying with the cell phone company for 24 months at a inflated monthly rate, then you must pay the sales tax based on the inflated "Sale Price" of the product. You also pay a tax on the inflated contract price, and more tax for the 911 system, even a $8 tax on the freeway call boxes too.

Everyone knows that the cell phone company is not giving away the phone for $1, they are actually charging you $45 a month in cell phone charges when $15 a month is more than enough to cover your actual cost for them to run your phone a month. The extra $30 is going to help pay for that phone (that they buy 1,000 at a time for about $45 each) and to go to pure profits of the cell phone company.

So what I am taking 5 paragraphs to say is that some states might tax you based on the recommended sales price, not what you actually paid for it. You will have to check with your local state.

Good luck!

Fred.

pompomgirl

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Posted: 04/11/14 10:20pm Link  |  Quote  |  Print  |  Notify Moderator

Quote:

I would say that you "Should" pay the tax based on the sales price. However you never know what the local state or county government will base it on.


That's right. A friend of mine here in Washington bought a used Mercedes at a very good price, and the state tried to charge him tax based on the Kelly Blue Book. They said they started doing that to prevent people selling cars to their friends for $10 and taking the rest in cash. Last I heard, he was still contesting it.

bigdogger

Texas

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Posted: 04/11/14 10:36pm Link  |  Quote  |  Print  |  Notify Moderator

pompomgirl wrote:

Quote:

I would say that you "Should" pay the tax based on the sales price. However you never know what the local state or county government will base it on.


That's right. A friend of mine here in Washington bought a used Mercedes at a very good price, and the state tried to charge him tax based on the Kelly Blue Book. They said they started doing that to prevent people selling cars to their friends for $10 and taking the rest in cash. Last I heard, he was still contesting it.
Many states have gone to using book valuations to determine taxable values for that exact reason.

Pangaea Ron

Anacortes, WA, USA

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Posted: 04/11/14 10:44pm Link  |  Quote  |  Print  |  Notify Moderator

Your tax should be based on what you wrote the check for, but if it's $10 for a $100,00 vehicle, you will probably have a discussion with the State. You will lose.


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