Its for the chullen doncha know
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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.
No. And there is a mechanism that a purchaser may use to show what the true value of the used car is, and be taxed at that amount.
Are the opportunity costs of availing yourself of that mechanism higher than I think they should be? Yes.
Will people find a way around this law? Yes. Rather than pay $300 for a certificate of value, I expect that a lot of people will just pay some guy with a used car license $100 for a straw man transaction (which is taxed on the sale price, not book value), and then pay the real seller the balance of the sales price on the side. The buyer saves some taxes, and the used car dealer makes $100 for thirty seconds paperwork.
That just makes this new law a poorly thought out, and hurriedly slapped together, burden on the law abiding and an opportunity for crooks -- not unconstitutional. I get aggravated at people, DUMMIES or Freepers, who assume that any government action that they don't like must be illegal, and that they ought to sue.
As a Texan you ought to know that "a poorly thought out, and hurriedly slapped together, burden on the law abiding and an opportunity for crooks," describes a lot of what the Texas Legislature does when it meets for five months every two years (and yes, I know this particular bill was passed in a special session). The only defense I can offer for the Texas Legislature is that the Legislatures of States who allow them to meet year round, California, New York, do even worse.
I don't really understand the need for the $300 "certificate of value". A dealer estimate on the cost of repairs needed to get up to book value should be all that's needed to establish the value. I don't know of any dealership that charges $300 for a repair estimate. This is the part that sounds like a scam.
Exactly. And at the State-generated price, not the actual price. (Isn't that one of the main purposes of the fair tax?)
Property taxes are confiscation a little at a time, so over a period of several years, the gommint has taken more than the value of the property. Gommint could never allow us the use the word "communist", but that's what it is.
You say it's not confiscation? Then try to skip paying taxes on it and you'll see how fast they put a lock on the door or tow your car away.
If you own a business, gommint is a silent partner. It does no work, it brings in no business, it pays you nothing. It tells you how to run your business. It takes a nice juicy percentage of the business' money. All for doing no work and breaking your cojones.
Any authority exercised but not given is unconstitutional. I have no right to set the value of something you want to buy. Only the seller has that right.
If an individual doesn't posses that right, the the political body of the People cannot posses that right, and there is no way they could have given that authority to the State.
My personal likes or dislikes never entered into it.
As for the rest of your post, I agree!
A guy sets up shop with a huge collection of damaged quarter-panels, mangled bumpers dented doors etc. for 35 bucks you can be buying a wreck.
Work around two (I really like this one, and will talk to our mayor about it tonight) a registration jurisdiction in Texas puts a licensed dealer on staff who appraises cars at their true market value for free. After word gets out people flock there from DFW metro to register their transactions, sucking money from DFW, and pumping the local county.
I see it as a great opportunity for somebody.
So the resale of a home won't be subject to the "FairTax", or does "taxed once" really mean "taxed once per transaction"?
I just bid on two '04 Ford F-150 PU trucks in an on line auction and expect to pay less than $1500 on either of them, wonder how that will affect me if I win the bid.
Did your brother in law give you your money back?
* Federal Unemployment Tax
* Workers Compensation Tax
* Social Security Tax
* Medicare Tax
* State Income Tax
* State Unemployment Tax
* School Tax
* Sales Taxes (State and Local)
* Real Estate Tax
* Property Tax
* Building Permit Tax
* Well Permit Tax
* Septic Permit Tax
* Utility Taxes
* Severence Tax
* Corporate Income Tax
* Accounts Receivable Tax
* Privilege Tax
* Inventory Tax
* Food License Tax
* Fuel permit tax
* Inheritance Tax
* Interest Expense
* Capital Gains Tax
* IRS Penalties
* IRS Interest Charges
* Liquor Tax
* Luxury Taxes
* Marriage License Tax
* Service Charge Taxes
* Telephone Federal Excise Tax
* Telephone Federal Universal Service Fee Tax
* Telephone Federal, State and Local Surcharge Tax
* Telephone Minimum Usage Surcharge Tax
* Telephone Recurring and Non-Recurring Charges Tax
* Telephone State and Local Tax
* Telephone Usage Charge Tax
* Vehicle Sales Tax
* Vehicle License Registration Tax
* Recreational Vehicle Tax
* Trailer Registration Tax
* Road Toll Booth Taxes
* Toll Bridge Taxes
* Toll Tunnel Taxes
* Watercraft registration Tax
* Gasoline Tax
* Road Usage Taxes (Truckers)
* Dog License Tax
* Fishing License Tax
* Hunting License Tax
* Cigarette Tax
: ) ..... : )
Double taxation is a valid argument, but everyone that buys a car through a dealership pays it. Those skirting the tax are perpetrating fraud, not dumping tea.
The answer to this crap is a state version of the FairTax, a retail sales tax that takes the place of ALL property and business taxes in Texas. This broadens the tax base because legal citizens and illegal immigrants would all pay the SAME sales tax in Texas of 11 percent (4.75% above the current rate of 6.25%) when they buy NEW items only (not USED cars). Legal citizens are sent a check each month from the state reimbursing for the sales tax paid up to the poverty level. More background at "A Fair Tax for Texas?" http://www.texaspolicy.com/pdf/2005-01-fair.pdf
The FairTax at the national level (http://www.fairtax.org/) continues to build support with over 50 sponsors on the House bill that abolishes the IRS, the Internal Revenue Code and the need for filing a personal income tax return (what will you do with that extra time each spring?). An open letter endorsing the FairTax was written to the President, Congress and American people in April 2005 by 81 professional and university economists (http://www.fairtax.org/eco_endorsements.html). FairTax FAQs can be found at http://www.fairtaxvolunteer.org/smart/faq-main.html
The house and property are considered previously taxed, so they would not be subject to the fedeal sales tax on resale. Certain aspects of the transaction, such as agent commissions or fees, would still be taxable as consumer services.
As for state/county/local taxes, well, that'd still be up to those jurisdctions.
Thanks for the answer.
No problem. The NRST/FairTax is a simple concept, but always seems to spark questions because people are so used to the system being convoluted and designed to shaft the taxpayer. It takes a while to adjust to simplicity. :)
*Ping*
I still prefer a truly flat tax - no, not a flat percentage of income, but a "everyone pays $X per year" one. That, far better than anything else, would actually shrink the size of government.
Its for the chullen doncha know
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