The short of it is, the state KNOWS many people avoid the actual sales tax by deliberately cheating on the Bill of Sale. What else would you expect them to do? Wouldn't you be angry at your state bureaucracy for NOT trying to address it, when the only way for them to recover that loss in taxes is to increase taxes on everyone - both cheaters and non-cheaters?



I remember this insanity after I moved to CT... but it's just "business as usual" for those who live there: First you pay sales tax when you buy and register the car.. THEN you have the privilege of bending over and paying "property tax" EVERY YEAR on the value of your vehicle(s). I moved to MA, then to NY and the total we pay in taxes is higher than CT as an overall %, but somehow it doesn't chafe me when it's only income, school and real estate property tax, and not a perpetual tax on my toys.

NY is reputed to check book value vs Bill of Sale at the time of sales tax/registration.. and also reported to check purchase vs sale price upon RESALE of the car, so the state can possibly track Capital Gains you earn on the re-sale, even private transactions.
So, since the cars I own were all bought far below market value, in distressed condition, and I fix them up, my Bill of Sales always include a written description of their condition: Non-roadworthy, etc, etc. Aaand I keep records of the work I do to the cars, the parts I buy, sales receipts and all.

Fun stuff.
- Art

Here is what happens. You only have to say I paid what it was worth. They baited you with a non registered letter and you bit.

Ummm how much tax should I of paid on 360k stock sale profit? Someone missed something and it was not me. So much for trying to be cryptic. My point was to pay the man and move on is a smart thing to do at times.

I know you said you were going to pay it, but it may not hurt to go to a dealer and explain situation.

More than once I have had to deal with similar situations and you would be surprised how many businesses are tired of being ripped off by the government and are more than willing to tell the truth on the original value of the car. I have had a few tell me they will put whatever I want but I stick to the truth.

Just a thought.

Kudo's for being the honest type.

Be happy that you're not in ILL-inois. The state is so hungry for money that they now have a tax on cars being traded in.
I have nothing to trade in, but have been wanting to purchase a new vehicle for at least 3 years. I refuse to do that while living in Illinois. I will buy a new vehicle once i leave the state (just retired and working on that now)




They're working on that. A cashless society is their goal...EVERY private transaction will one day be recorded, monitored, and taxed accordingly.
No more paying $20K for a classic car and reporting it as $500. They will know what you paid.

What are the actual repercussions of telling them to pound sand? If it is indeed a SALES tax you owe some percentage of that nothing more. If they charge you more, it is not a sales tax but and transaction fee.

I wouldn't pay it and I wouldn't phone them again. I would send them a letter, certified, return receipt requested. The letter would state what I paid for the car, That it was an arm's length transaction at fair market value, that I paid the appropriate tax, And that there is nothing further to discuss. I would inform them that if they disagree, that the burden of proof is on them and to submit their evidence to you for consideration, and that all correspondence must be by mail. Doubtful you would ever hear back. I have been in business for 40 years, and have been constantly harassed by petty, small minded, power hungry bureaucrats. Local, state, county, federal, IRS, EPA, Dept of Labor and industry, etc. One thing I have learned is to never, ever, communicate verbally or via email. Always and only via certified mail. It diffuses their ability to enjoy the power trip, raises concern that they could be held accountable for mistakes, and all but the most hard-core will close the file and move on to an easier mark.

Brilliantly stated...

they have been doing that here for years now.. too many people over the years claimed they paid 100 bucks for a car worth 20k..lol all it takes here is a signed form from the seller saying that they sold it for what you claimed when titling it..

Couldn't more!

I've got something similar going on here in WV. The witch at the DMV wouldn't let me transfer a signed WV title, and told me that i had to have the VIN verified by LEO. I looked up there rules and there's nothing about that in there, and verification is only needed if you don't have a title or the VIN tag is missing. There's a fee involved and I need to take time off work because they're only open during business hours.

I'm pretty sure their point is to squeeze me on sales tax, like they're doing to Zippy, or maybe it's a ploy to get a cop on my property to nose around. Either way I wish I would've known this was coming before I fixed most of what was wrong with it.

just don't title it in your name.. sell it and move along..you never owned it..

LIKE

several years back, my cousin charlie had a pretty nice 55 chevy.
he traded it even, with a guy that had a 34 ford coupe with, what was thought to be, a blown engine. [that turned out to be only a couple of bent pushrods.]
both cars were about equal in value, with charlie's 55 being a nicer car overall.
the guys went to the notary to change titles, pictures were taken to prove each car's condition, and each guy signed affidavits saying this was a straight across even trade with no money changing hands.
well, a few months go by, and charlie gets a letter from PENNDOT saying in effect, we want tax money.
so just to respond to the letter, he went to the notary used in the original transaction. that guy came up with a couple of forms to sign, and charlie then declared he paid $100.00 for the 34. he sent in $6.00 tax along with a copy of the original PENNDOT letter and the forms the notary came up with, and never heard another peep from harrisburg.
like the famous movie quote : "it's all about the benjamin's !"...............

So what do you do when you buy something and want to keep it?

It's bad enough that they charge me a tax every year on things I already own and paid sales tax on. Making up the rules as they go is what has me spun up about the whole thing.

When I bought my 49, I had pictures of it in as bought condition. Then I transferred the title into my name and paid the tax due on the $600 purchase. After I received the title to the 49 with my name on it, I started working on it. If the State come back with wanting more money, I still have the picture proof of the as bought condition. I've played in this movie before.

I have to wonder if some of this additional revenue they want may be based on what we buy the insurance coverage for. IL is a required insurance state. I'm pretty sure my insurance sends them info on my coverage. If I have a Hagerty coverage on that 49 I say I paid $600 for with a value of $20,000, some bureaucrat might say, look, this guy has this vehicle covered for 20 G and he said he paid $600 for it 2 years ago, He must have underpaid the tax on it...

I had the same experience. My notice came, several months after purchasing in 2018, from a government official noting that "Michigan State law states the tax owed is on the amount paid or actual value, which ever is greater"

SOS stated the vehicle was worth more than double what I paid.

I was able to get an actual receipt as I purchased it from my employer. I also was able to get a written appraisal from a dealer noting what it would have been worth pre-repair without to much hassle.

I ended up owing a bit more tax, but not what they initially requested

As far as repercussions, your dealing with the Secretary of State (DMV) they can void your registration, suspend your license, garnish your tax return...

Agreed 100% Jon, Secretary of State is nothing to mess with.

In times like these sometimes it's best to make it go away as easily as possible, drop it, get on with life, and call it a lesson learned.

....being me, I did write "THEFT" in the memo area of the check, and sent a letter explaining
this did not constitute an admission of guilt, but only a lack of desire to waste time on the issue.

Take care.

if people wernt putting down they paid 500 for 5000 plus veh\icles we wouldnt be here

Well, if we're going to go down that path, if the greedy government workers and politicians weren't fleecing the citizens every time they buy and sell a vehicle, people wouldn't be understating the value.