Casual sale tax on cars

Submitted by tapemeasure43 t3_y6gyd5 in massachusetts

I have always bought and sole my cars privately and had no issues reporting the sale price and paying sales tax at the DMV where I used to live in NJ. This morning I was shocked at the RMV in MA when they valued my purchase as several thousand more then what I paid and taxed me on this amount despite me having a bill of sale for the amount I paid.

Let me be clear: I am not talking about the loophole where you underreport the sale price in a casual sale. I actually paid what I reported on the bill of sale. This is ridiculous that I’m paying an extra $300 in sales tax when the RMV has no idea of the condition of the car I purchased. Is there any way around this.

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Loinpurloin t1_isp4lc6 wrote

LP REMEMBER HAVING TO GET CAR REASSESSED TO PROVE TAX LIABILITY SOME YEARS AGO AND IT TOOK SO

SO

SO

LONG

NO REMEMBER HOW LP EVEN DID THE THING BUT REMEMBER THINKING IT NO WORTH IT BY THE END :(

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downwardspiralstairs t1_isp4p22 wrote

It's taxed at the same value that the auto excise tax uses. If it's KBB or something else I'm not sure.

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Peeeculiar t1_isp5hvf wrote

It sounds like the RMV thinks you got a bargain. Well done!

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lvalleli t1_isp6syb wrote

They take the higher between book value and what you paid, no matter which is higher. Completely closes the loop hole, but also absolutely strings you along if you have an odd situation car. I’ve paid over double what I was supposed to before, but it is what it is

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tapemeasure43 OP t1_ispdy87 wrote

Replying to lvalleli (#125,764)

I wouldn’t even call this an odd situation though. Car was in decent condition and I’m really good at negotiating when I have cash in hand so I paid what I paid and it was thousands less then the book value.

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Quirky_Butterfly_946 t1_ispf5wf wrote

That's because MA like to stick it any way they can.

I bought a toyota corrolla off a group I was associated with for $500. The greedy Fks at the registry did the same thing and took the KBB value with was something around 2.5K

Evil greedy state screwing their citizenry at every turn.

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TooTallForPony t1_isq1hwe wrote

I once bought a car for $50 at a police auction. Paid $52 in excise tax. 104% tax rate!

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Loinpurloin t1_isq1xse wrote

Replying to dizzish (#127,397)

LP JUST USE SYMBOL YOU NO SEE‽

LIKE SAID LP NO SHOUTING LOOK YOU WITH TWO EXCLAMATIONS ONE POST WHO SHOUTY NOW HO HO HO IS BELLY LAUGH LP JUST BE CHEEKY

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March_Latter t1_isq9vv6 wrote

I agree completely. Its a sales tax on a price negotiated by two parties. What the RMV does is state that one or both parties committed fraud without a court hearing or proof. Or as the founding fathers decided "due process" I would love to see someone fight this into an actual court.

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Cost_Additional t1_ist0i41 wrote

It's honestly absurd. My car is worth $400 and each time for renewals the lowest they could evaluate it at is $1,500.

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UniWheel t1_istrbjl wrote

Replying to March_Latter (#127,901)

> Its a sales tax on a price negotiated by two parties.

Except that it's not.

The tax is imposed by law, and the law says that the taxable value is NOT simply the purchase price, but rather the higher of the purchase price or the book value.

Clearly you disagree with the law, but it actually is the law.

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UniWheel t1_istrg3l wrote

Replying to March_Latter (#131,378)

>no basis in law.

On the contrary, it's literally the text of the law imposing the tax which says that this is how the taxable value is to be determined.

Clearly you disagree with that law.

But its basis in law is the fact that it's exactly what the law says.

They could have written the law to establish a fixed tax to be paid no matter what the value of the car, too - and that would be every bit as much a valid law, if perhaps one unlikely to have passed.

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March_Latter t1_isuhosa wrote

Replying to UniWheel (#134,251)

Do you know it was only decided in 2019 that the people were fraudsters while the business engaged in car sales were clearly honest? That creates a system that lets a group claim a value while a citizen has no defense. Again. No basis in law and should be challenged. I don't care if we are in a blue state. People have rights.

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March_Latter t1_isuiet8 wrote

Replying to UniWheel (#134,243)

So the town stops by and decides your house is worth double what it truly is. They send you a bill but you get to contest it. Why is this? Because you are asking an outside group to set a price. This gives a bit of due process in case of error. In the case of the car the state wins no matter what, so no due process. It also tends to be a direct tax on the poor as its not the well off that buys these down market cars. So no only are we not allowing due process we are taxing the poor extra.

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UniWheel t1_isuvd4k wrote

Replying to March_Latter (#135,943)

You're still caught up in the idea that the tax is based on the sales price or the actual value of the car. But it's not.

According to the law, it's based on the greater of that or the book value.

You have due process, because you can inform yourself what the tax on the car is going to be before you decide to buy it. Apparently you assumed it would be based on the sales prices - that's an understandable mistake, but still a mistake of assumption contrary to the law on your part.

Now in terms of the distinct subject of excise taxes on already purchased vehicles, or property assessments, yes, the value of something you already own can go up, and long with it the taxes due. But the appropriate government process can also simply change the tax rate.

To win, you're basically going to have to show in court that you are being unfairly singled out, rather than being subjected to a policy that is the same for everyone.

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