http://www.dot.state.tx.us/services/...tive_value.htm

I cannot believe Texas passed such a law. I dont believe it will stand for long - Too many people buy used cars below the average sales price, as such, they will refuse to pay extra taxes. For example, say you buy a clean title 95 FD roller for $8k, the average sales price is in the mid to high teens. In this case the buyer would pay taxes based on a sales price that is nearly twice as much.

What do you guys think? Any way around this?

Evan

 

While, it sucks for some people, I think its a good idea. It came about because everyone cheats out the state by saying they got the car for free or something, so its all of those people's faults this law was passed.
The reason I like it is because it means more money for schools. While many of you may not care, Texas schools need all of the money they can get, as do Texas teachers.
Also, if you can prove that there is something wrong with the car (salvage title, no engine, etc.) then I'm sure you won't have to pay the full taxes on the car.

 

I agree that it is important to help Texas schools and teachers. Education is vital and teachers do deserve the money. Although, I do feel it will be a headach if to get around it (i.e. blown motor, etc). Many cars are sold at a discount, especially cars with selling characteristics like the RX-7's. I hope they provide a way for buyers to avoid excessive taxes without too much work if that is truly the case.

Evan

 

My 94 Rx7 with 70-ish kmiles was less than $10k

 

dang yall texans are gonna get raped for buyin a used vehicle that sucks. i'm not sure if it will work or not but i would almost think you might be able to buy the vehicle out of an transfer it in that way you might be able to get around some of the taxes but i'm not exactly sure.

i had a friend who won a lot of money at a casino so he had his friend in mississippi buy the truck there an then donate it to him here in New Orleans so that he could get around some of the louisiana sales taxes

 

It's really not that difficult. If the car's not worth what the book says it's worth, you merely PROVE that it's not worth it (ie, no motor) and you'll get a discount. It's not like they're gonna make you pay $20k for a salvage title, motorless, burned to the ground rusted hulk!

 

The dollar amount is based on essentially the dealer trade in value listed in KBB. It does suck, but it also has very specific guidlines for what it takes to get it for less. I just went through this, but my car was purchased before Oct 1st, so I was grandfathered in, so to speak.

There is a very valid point though to make sure people are paying their share of taxes. Currently though, based on my conversations with people at my local office, there is no way to get around it. Salvage titled vehicle being the only exception I think. But the reality is that the difference in vehicle tax on $5k roller, and then $10-$12k KBB value is only a few hundred dollars, and isn't going to kill anybody.

 

I care, but they already get hundreds of thousands of dollars a week from the lottery. Does this mean now my wifes car will stay in her mothers name until she dies, and THEN we get to pay taxes on it again? Sounds like a plan!

 

I agree!! What a bunch of ****, they need to manage the tax money they already get from us.

 

Sure, what's 8.25% of $12,000 - 8.25% of $5,000? $990 - $412.50 = <b>$577.50</b> That's nothing, eh? You drive an FD don't you? For me that's almost half of my mortgage payment. If I had to pay an extra $600, I wouldn't buy the car.

 

Dam, my friend just bought an FD, he wont have the cash to register it lol!

 

If you goto that link in the first post there is a calculator to figure the value and that is the price you will be paying! Exemptions are for things like salvage, >25 years old, etc. I pulled some VINs from the vin check section. A 2006 mazda6 w/ 120,000K miles was 12,500$ It couldnt find a value for a 85 FB with the same milage. It sounds like they use the same reasoning to figure value that insurance cos now use for determining value when totaling out your vehicle. There are still provisions for gift vehicles with something like a 15$ gift tax.

 

For you'all that think it's reasonable, you must not buy and sell a lot of cars. What a hastle. The law has to go.

In my mind you should only pay sales tax on the car the first time its sold. Talk about double, tripple, and quadruple taxation. Kinky would have taken care of us.

Edit and PS. - If the state had there way, you will soon be paying sales tax on ebay, and every paypal transaction. We have lost controll and everyone seems to be fine with it. If you rent go ask your landlord how much in property tax you pay. Our sales tax rate is one of the highest in the nation, and what the hell has happend to our utility bills.....end of rant.

 

Um sure I drive an FD... not sure what that has to do with it. I spent 8 years driving my FC that I sold barely a year ago and my FD was basically free after I sold the parts I didn't need

Second vehicle tax in Tx is only 6.x%, not 8.25. So the difference would be ~$420.
Not great, but on $5k whats another $420? It's not like it's an anual thing.

Don't get me wrong, I don't like it cause I do buy and sell cars. But it isn't going to kill me.

 

do what we do here in LA! we just say we buy the car for about 100 or 200 if its used! also we do this with in reason. if im buying a pourche i dont say i bought it for 200 but a FC or FB ya an FD could be bought for 1000 id say by state terms! lol

 

Did you even read the new law? It doesn't matter what you claim to have paid you still pay the tax on the average retail price. It's because of people like you that cheat the system. Now we all have to pay.

 

Well, let's review with some real life scenarios.

I bought my '92 Mercury Capri convertible for $1000, because it had hail damage, the window motors didn't work, the headlight motors didn't work, a cracked radiator and I had to change a belt on it before I could even get it off the used car lot I bought it from. My sales tax would be $83 (I suppose, I don't know how they calculate it, because they didn't ask me if it was a second car or anything) Book value on the car at the time was about $4000. So that would have been another $250. I wouldn't have bought the car for that, because now you're asking me to pay an EFFECTIVE 35% tax on the car.

I bought my '87 Rx7 for $500 because the wiring, and interior were shot, the paint was gone, and the engine had almost 200,000 miles on it. Sales tax on $500 is $40. Book value on it was again, about $4000. 8.25% of $4000 is $330. Now my EFFECTIVE sales tax is 66%! What's a good deal at $500 is a walkaway at almost $900, considering the work involved. Ask Tessai how much paint costs for a second gen , then figure up how much new interior, new wiring, and a rebuilt engine would cost, and then why would ANYONE buy a $500 fixxer-upper instead of spending $4000 on one that's already in excellent condition? I enjoy working on cars myself, but I'm not stupid. I get good deals because I'm willing to put in the wrench time, now the state of Texas has just wiped that out.

Do you really not see this as a bad thing? Are you a state representative or something, too? Besides, whether you can afford it or not is a mere subplot of 'is it right to do this'. It's usurious.

Otherwise you would have no right to get upset if someone keyed your car. Because it's only like, $500 to fix it, and what's that on top of the price you paid for your car?

 

ummm i live in louisiana!

 

Good on ya, no worries until a few years from now when Louisiana starts doing it. People in Texas didn't care when Arkansas was doing it years ago. I just can't believe this piece of legislature was passed so close to election time, and the governor STILL got re-elected! Doesn't anyone vote anymore? Take a stand against the oppression of your motorhead people! Most of the voting public doesn't care about this type of law, because most of them are leasing new cars anyway, so it doesn't affect them. Take a stand, make democracy work for you! :P

 

to much coruption over here! fema money + louisiana government = missing money. i miean hell they wont even fix the levees

 

Yep, I lived there back when they did the "If you have no insurance we'll impound your car" law, so that they could seize and sell it after a few days. I got pulled over with Texas Insurance (I was going to college in Louisiana, living in Texas) and they said that wasn't good enough and confiscated my temporary plates, said I had 3 days to prove I had insurance and if I drove with no plates they could seize the car. I parked it for 2 weeks until my permanent plates came in the mail.

 

Clearly you didn't read the part where you can dispute the "book" value if you can prove it's not worth that. In your case, it certainly looks like that proof would have ben easier to provide than typing your rant....

 

And it's people like you that are forcing this legislation. If you were honest, we wouldn't have this problem.

 

Oh no, I find ranting tremendously easier than trying to wade through the bureaucracy at the Texas DMV. I seriously type between 100-120 wpm, so the whole 'rant' I put down only really took less than two minutes to write and submit.

In fact, if you'd like, I can do 500 words on why Velveeta shouldn't be considered a true cheese product, or why the rocks in my yard are different from the rocks in my neighbor's yard. For me to put down a couple hundred words in response to something I truly believe is wrong is pretty easy when you compare it to how easy it is for me to write a couple of hundred words on something I really don't care about.

My cars are both registered and titled in my name, so it doesn't matter to me. But that doesn't change the fact that I believe it's wrong to have to do it that way. I could even see making it mandatory for private sales, but not for used car dealerships. All they're doing is making it more difficult to get and find a good deal on a car, and trying to make a quick buck, when they really need to worry about how to allocate and control the money they have.

Just like, wouldn't it be nice if our elected government officials were paid a nice salary, but one small enough so that those who are only interested in money and power would find something better to do, and leave the job to someone who actually cares about the future of their city/state/country?

 

No, they're not. All they're doing is closing a loophole that allowed people to exploit the system and not pay taxes on the amount they actually PAID for the car. It has almost zero effect on the rest of the citizens who followed the rule to begin with.