Does anyone know if you have to pay state taxes on a used car bought from a private party? I mean I'm sure Uncle Sam wants you to but do you really have to. There must be a loop hole somewhere.

 

I think you have to. Though, the loop hole that you can do, is write the sale price of the car a LOT lower than what it was sold for and pay a lot less tax and pay the rest under the table.

 

Yeah, when you register the car for the first time, they will calculate the tax off what you paid for the car (or, what is reported that you paid for the car).

 

That's what I did. I tried writing "gift" in the space provided but the DMV lady said I had to declare a sale price. So I thought of a reasonably low price. She didn't really seem to care.

 

Yeah, you have to pay sales tax based on what you report. Obviously, dont put like 50 bucks.

I always put like 2-3 grand on cars that cost 10k

 

I paid $350 for a Honda GoldWing. The DMV inspector (who just happend to own the same bike and new its "real" value) gave me a dirty look and said OK.

 

They dont charge you sales tax, if the sale of the vehicle was $500 or less.

-Ted

 

Cool thanks for the info

 

Dont go TOO low. I know in WA (this may be true in CA as well, dunno) that they compare the sale price to the blue book pricing for the car, and if its too far below, you get a nasty letter. You then have to show good proof (and a person to person receipt didn't count - had to show a cancelled check or waithdrawl receipt or something) it was sold for such a low price and the reason it wasn't worth full blue book.

--M