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Discussion Starter · #1 ·
I don't know if this is the correct forum for this question or not, but since I am looking at buying an E39, I will ask here.

I was just told that I have to pay CA sales tax if I purchase a car from a private seller. I have never bought a car from a private seller in CA. Is that the truth?

Thanks!
Bill
 

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Mr Hyde said:
If its like NY, you pay the tax when you register the car.
Yep, most states require you to pay the sales tax before they will register the car, unless you can provide some receipt to show that the tax has already been paid to another state or already collected on your behalf by the dealer.
 

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Bill-SD said:
I was just told that I have to pay CA sales tax if I purchase a car from a private seller. I have never bought a car from a private seller in CA. Is that the truth?
I see SARAFIL already answered... But if you want to see what all is required, you can look at the CA DMV web site. They have alot of the info about buying a car in California on line:
CA DMV
 

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Yes it's true. Sales tax is paid on all merchanse bought in California, whether new or used, retailer or private party.

Bill-SD said:
I don't know if this is the correct forum for this question or not, but since I am looking at buying an E39, I will ask here.

I was just told that I have to pay CA sales tax if I purchase a car from a private seller. I have never bought a car from a private seller in CA. Is that the truth?

Thanks!
Bill
 

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Discussion Starter · #6 ·
Robert A said:
Yes it's true. Sales tax is paid on all merchanse bought in California, whether new or used, retailer or private party.
You know...that's not the answer I was hoping for.
 

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Discussion Starter · #7 ·
M.Wong said:
I see SARAFIL already answered... But if you want to see what all is required, you can look at the CA DMV web site. They have alot of the info about buying a car in California on line:
CA DMV
Thanks for the link. Question: How does DMV know the sales price? Could you "fudge" a little?
 

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Bill-SD said:
Thanks for the link. Question: How does DMV know the sales price? Could you "fudge" a little?
If it's like my home state, yes. But they keep handy a lil yellow book (NADA) that shows the book value. If a car is too low, they raise eyebrows.

My uncle once sold me a three year old car for $3000. :eeps:
 

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Bill-SD said:
Thanks for the link. Question: How does DMV know the sales price? Could you "fudge" a little?
Yeah you can fudge...just be reasonable. They wont believe you paid $5000 for a 2000 540i...but if you paid $30K and out $25K that is reasonable and saves you alot of money on tax.

Here is what I have done in the past. When I buy a car from a pvt seller, I ask if they wont mind writing up TWO bill of sales for me. One for me and him to keep...and one just for registering the car. I take the "real" paperwork and save it etc...then I take the fudged bill of sale to AAA and register the car with a nice discount on it. YMMV but goodluck!
 

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how the DMV knows

Private purchase: (1) seller notifies DMV of sale (2) buyer applies to DMV for new title & registers in buyer's name. Buyer signs form stating purchase price under penalty of perjury.
The DMV can question the claimed purchase price if they want to (I've never heard of this happening, but it could happen)

Tax is based on local rate, around 8.5% of purchase price. Seller is responsible for car passing smog test.
 

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Well you are getting into the arena of voluntary compliance. However, keep in mind that the seller has to send a statement to the DMV indicating the sales price, so if you want to show a lower figure, that figure has to agree with that which the seller provides.

Bill-SD said:
Thanks for the link. Question: How does DMV know the sales price? Could you "fudge" a little?
 

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Robert A said:
Well you are getting into the arena of voluntary compliance. However, keep in mind that the seller has to send a statement to the DMV indicating the sales price, so if you want to show a lower figure, that figure has to agree with that which the seller provides.
You guys are lucky. In RI, when you buy from a private party, you are charged tax based on the NADA book value of the vehicle. They do not take your purchase price into consideration at all. As you can imagine, alot of people are not happy about this, and they are forced to apply for a tax credit for the excess tax paid after having the car appraised by a licensed dealer to determine a fair value.
 

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OTOH, with some of the Eastern states isn't sales tax determined AFTER subtracting the value of the trade in (on transactions involving a dealer)?

SARAFIL said:
You guys are lucky. In RI, when you buy from a private party, you are charged tax based on the NADA book value of the vehicle. They do not take your purchase price into consideration at all. As you can imagine, alot of people are not happy about this, and they are forced to apply for a tax credit for the excess tax paid after having the car appraised by a licensed dealer to determine a fair value.
 

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Bill, how's your back doing?

Good luck on the E39, this doesn't mean you're getting rid of the M3 does it? :dunno:
Is it a 540? :thumbup:
 

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Discussion Starter · #15 ·
Keith said:
Bill, how's your back doing?

Good luck on the E39, this doesn't mean you're getting rid of the M3 does it? :dunno:
Is it a 540? :thumbup:
Hey Keith,

That's what I'm thinking. You know my back is pretty messed up and the M3 isn't the most back friendly car. I'm better than I was at Bimmerfest but still not right. I just started looking at the 540's and they are very nice. If I do this, I know I will miss the M3 and will probably end up getting another in the future. I wish I was one of those guys who can afford to have both...but not at this point :bawling: I'll let you know what I decide! Been on any good drive lately???

Bill
 

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I sold my boss a Pathfinder, it was about two years old at the time. I left the amount blank on the title and he tried to under report the cost by 15 grand or so. They let him refister the truck no problem but months later they sent him a notice to appear or provide good cause why the vehicle was sold at such a low price.

Luckily I had photos of some serious off roading I did one day where I got stranded crossing a stream. The truck was in imaculate shape but the pictures showed a truck up to the door seals in mud and water with a tow hitch pulling it out. I gave him the pics, he mailed them in and they accepted the vehicle was worth less due to damage. If it wasnt someone I worked with I would have said tough luck.

I will never leave the price blank on a title again.
 

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Robert A said:
OTOH, with some of the Eastern states isn't sales tax determined AFTER subtracting the value of the trade in (on transactions involving a dealer)?
Yes, you subtract the value of your trade in when paying tax.
 

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Bill-SD said:
Hey Keith,

That's what I'm thinking. You know my back is pretty messed up and the M3 isn't the most back friendly car. I'm better than I was at Bimmerfest but still not right. I just started looking at the 540's and they are very nice. If I do this, I know I will miss the M3 and will probably end up getting another in the future. I wish I was one of those guys who can afford to have both...but not at this point :bawling: I'll let you know what I decide! Been on any good drive lately???

Bill
Hey Bill, check you email! :thumbup: :D
 
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