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Buying a used car? Prepare for the tax bill [TEXAS]
STAR-TELEGRAM ^ | Sep. 26, 2006 | ANTHONY SPANGLER

Posted on 09/26/2006 6:30:36 AM PDT by Dubya

Used-car buyers beware -- of your sales tax bill.

Starting Sunday, tax offices across Texas will use a new system to determine sales taxes on private used-car purchases, which could set the value at more than someone actually pays for the vehicle.

Tarrant County is considering placing deputies or constables at tax offices when the new law takes effect.

"It's going to be a little bit of a shock to some people," said Betsy Price, Tarrant County tax assessor-collector. "We might have to charge them a lot more if the vehicle is valued higher."

Called "standard presumptive value," tax assessor-collectors will use a Texas Department of Transportation guide to determine a vehicle's value, regardless of how much a person pays for the car. The law would not apply to vehicles purchased through licensed dealers.

Buyers should expect to pay tax on at least 80 percent of the state-determined value, even if they paid less than that for the vehicle. State sales tax on used cars is 6.25 percent.

Mary Nell Mathis, tax advisor to consumer advocacy group Common Cause Texas, said the new guidelines could be fair.

"A $500 difference in the price of the car would only be $31.25 difference in sales tax," she said. "For most people, that's hardly worth arguing over. Some people will win and some people will lose."

TAX-STICKER SHOCK

New state guidelines meant to prevent fraud in used-car sales among private parties could mean higher sales taxes for used-car buyers.

Buyers will pay taxes based on a state assessment of the value, even if they paid less for the vehicle.

The law applies only to private transactions; it will not affect sales that go through licensed dealers.

A buyer can appeal the state's value of the car within 20 working days of purchase by getting a licensed car dealer or insurance adjuster to appraise the vehicle and fill out state forms, a process that could cost as much as $300.

The measure was among several bills passed by the Texas Legislature to generate money for school financing.


TOPICS: Business/Economy; Constitution/Conservatism; Crime/Corruption; Culture/Society; Foreign Affairs; Government; Miscellaneous; News/Current Events; US: Texas
KEYWORDS: friedman06; govwatch; texas; usedcartax; vehicletax
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To: steveegg
This is going after private sales, not dealerships. I am not in favor of higher taxes anywhere, but this came about because of abuse of the system.

Many years ago, father in law gave us a car. The gift tax was higher than if he would have sold it to me.

21 posted on 09/26/2006 6:55:47 AM PDT by SouthTexas (Of course it's hot, it's summer!)
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To: Dubya
The measure was among several bills passed by the Texas Legislature to generate money for school financing.

And Gov Perry.

I wonder where all the monies generated by our property taxes go, or the funds generated by the lottery....Perry and his money-grubbing cohorts need to go.

22 posted on 09/26/2006 6:56:37 AM PDT by Sarajevo (AAAh! Baghdad-dust, heat, more heat and more dust. I wish I had a beer.)
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To: P-40

They've been doing this up here in Massholechusetts for years now. Welcome to the club (sarcasm)!


23 posted on 09/26/2006 6:58:08 AM PDT by GOPsterinMA
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To: SouthTexas

Guess it's time for another tax revolution.


24 posted on 09/26/2006 6:58:26 AM PDT by steveegg (Let's make the deeply-saddened Head KOmmie deeply soddened in Nov. - deny the 'RATs the election)
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To: Dubya

Always sneaking one more tax in on us.


25 posted on 09/26/2006 7:01:38 AM PDT by freekitty
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To: Dubya

What really chaps my @ss is the fact that the Republicans have done this while sitting on an eight billion dollar surplus.


26 posted on 09/26/2006 7:03:27 AM PDT by TheDane
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To: daviddennis

It could make some cars cheaper. I would subtract out the tax amount from what I would be willing to pay. Of course some people wouldn't be able to figure that out (public schools provide great educations).


27 posted on 09/26/2006 7:12:06 AM PDT by zek157
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To: Dubya

This is simply wrong and should be challenged in court.


28 posted on 09/26/2006 7:16:40 AM PDT by ARA
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To: joebuck
I'm betting it will. In Oklahoma it does. And the nifty thing is you are taxed on what you paid for the used vehicle, if it's more than the assumed value, if less you pay the government's "value". And you can't call and get the government "value", it's like a state secret! It is charged every time the car is retitled to a new owner. Also you have to actually take the vehicle that was bought out of state to the tag agency so they can look at it, paperwork is not enough. Why this is part of the registration process is a mystery to me.
29 posted on 09/26/2006 7:19:12 AM PDT by pepperdog
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To: steveegg
Way past time for that!

Actually think this is more of an overreation by those buying cars for five grand and reporting the sale as five hundred.

30 posted on 09/26/2006 7:24:58 AM PDT by SouthTexas (Of course it's hot, it's summer!)
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To: Dubya

first they tax us outta our homes, now they are going after the used cars.... note, this is used cars, i.e. someone wise enought to not buy new or "POOR" folk who can't afford new!!!

it's pure EVIL!!! :)


31 posted on 09/26/2006 7:27:44 AM PDT by fhlh (Polls are for Strippers.)
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To: Dubya

Welcome to the state of Taxes (note new corrected spelling). Yet anotehr reason not to vote for Gov Goodhair. I will vote for Kinky.


32 posted on 09/26/2006 7:30:41 AM PDT by Hydroshock ( (Proverbs 22:7). The rich ruleth over the poor, and the borrower is servant to the lender.)
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To: Hydroshock

Kinky is for this kind of garbage, too. He's a liberal who talks tough.

That said, maybe we should tax hair gel,face cream, and manicures so Gov. Goodhair will leave the state.

They are ALL losers, this year.


33 posted on 09/26/2006 7:50:26 AM PDT by MeanWestTexan (Kol Hakavod Lezahal)
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To: steveegg

I just recently purchased a vehicle. When you go to the court house you can put whatever you want down as the price you paid......no questions asked.

However, there is a BIG sign there that says if you falsify this amount and you're caught the penalty is something like $1,000.00 and jail!!

Obviously I gave them the right amount.


34 posted on 09/26/2006 7:55:32 AM PDT by WestCoastGal (Monte Carlo????? Jr??)
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To: Dubya

"A $500 difference in the price of the car would only be $31.25 difference in sales tax," she said. "For most people, that's hardly worth arguing over. Some people will win and some people will lose."

As a kid, a few neighborhood guys and I had got in the habit of swiping an apple apiece from an old man's tree that sat close to a fence on the way to our school.

One day this petty theft came to a halt when he caught us in the act and after threatening to call our parents and the police convinced us without the use of violence that whether the apples were stolen one at a time or all at once, made no difference to the bare tree.


35 posted on 09/26/2006 7:59:40 AM PDT by Old Professer (The critic writes with rapier pen, dips it twice, and writes again.)
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To: Dubya
Can't wait to see how people will get around this and shove it back in their faces.

It's easy to get a used car dealer to vouch for ya.

36 posted on 09/26/2006 8:00:52 AM PDT by unixfox (The 13th Amendment Abolished Slavery, The 16th Amendment Reinstated It !)
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To: stephenjohnbanker
Called "standard presumptive value," tax assessor-collectors will use a Texas Department of Transportation guide to determine a vehicle's value, regardless of how much a person pays for the car.

But from the article it looks like Texas is going to get it worse. If I at least show up with a "reasonable" sale price, they won't check. Texas is going after an amount that is close to the retail price if I read the article correctly.

Good luck with this Texas, you may not have PIT, but you sure seem to be getting rolled over the barrel on this one.

SZ

37 posted on 09/26/2006 8:08:44 AM PDT by SZonian (Fighting Caliphobia one detractor at a time)
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To: K4Harty
So next time I go to a garage sale or flea market can I expect a tax bill from the state on the "assumed value" of the used items, etc. that I purchase? Sounds like a greasy slide toward a pile of ....

Just wait until you get taxed on the "imputed income" from living in your own house. Some politicians cooked up the idea that the fair rental value of your home is taxable even if you are living in it. They figure you are depriving the state of tax revenue by sitting on an asset that could be generating taxable income. They reason that you are getting a benefit by not have to pay that rent yourself for living in that dwelling (even though you are the owner and landlord). This is, of course, omitting any revenues from property taxes that they also assess.

38 posted on 09/26/2006 8:08:50 AM PDT by Myrddin
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To: unixfox

Since I have a house/ranch in New Mexico, this will be easy.

Needed to become a NM voter, anyway.


39 posted on 09/26/2006 8:20:27 AM PDT by MeanWestTexan (Kol Hakavod Lezahal)
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To: Dubya

And what they are also doing is establishing precedent for if and when Fair Tax comes to pass: by saying they can tax private transactions, they can tax anything twice.


40 posted on 09/26/2006 8:28:07 AM PDT by Maigrey (Airport Security - Useless Kabuki Theatre. - Ann Coulter)
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