Private Party Sales in Texas

[JR]

A new law went into effect last October. The state charges sales tax, not necessarly on what you pay another person for a veicle, but on the basis of what is called: Presumptive Value. Look at this web site, punch in the VIN of your bike and the odometer miles... the "presumptive value" of the bike for sales tax purposes will appear. I'm sure if you report on the Application for Title a larger amount, you will be taxed on the larger amount. If you report a smaller amouont the Tax Office Clerk can still tax you on the Presumptive Value amount from the TXDOT data base.

http://www.dot.state.tx.us/services/vehicle_titles_and_registration/std_presumptive_value.htm


JR

[Tourmeister]

:tab Yeah... we beat this one to death pretty good last year before it went into effect. If ever you needed a good example of the blatant and arbitrary tax power of the government, here you go. As a result of some dishonest people, we'll just treat everyone like criminals and make them pay regardless of whether or not they are honest... Typical government thinking... doh:

:tab I would like to know what determines fair market value for a vehicle if not the very amounts that people are willing to pay for the vehicles!? See the inherent illogical absurdity here? They are pretending that vehicles have a value apart from what people are actually willing to pay for them :headbang:

edit: Does this mean you just found out because you went to register a used bike? :trust:

[JR]

No, Scott.. I learned about it earlier ... don't remember how. I have an adopted younger brother who's a used car broker in Tennessee. I needed a vehicle. He got for me the 2002 Dodge Grand Caravan I had at your house when you and your family hosted the "Burger Burn" (A great time was had by all... Thank you very kindly) I actually paid him his broker's purchase cost... which was less than half the presumptive value, but when I registered it, because he'd signed the forms and provided his dealer number from Tennessee, I was taxed only on what I actually paid. I was told the "presumptive value" law came about because nearly everyone doing private party transactions lied about what they actually paid and thus deprived the state of it's legally due tax revenue. I, however, share your sentiments completely.
Yes, I'll be registering a newly acquired bike in a few days. I'm going to Randolph AFB to pick it up tomorrow. I'm picking up a 2001 Bandit 1200 S with but 7K miles on it from a flight school student at RAFB. I'm actually paying slightly less than the presumptive value.
I posted the item to include the URL so others might use it and know what to expect.

JR

[Beach]

I found out a few weeks ago when I brought the 03 DR650 to Texas and had to pay taxes on an additional $500.00 "presumptive value" over what I had paid for the bike.
Welcome to the "Great State of Taxes" :rant:

[bluedogok]

Welcome to the "Great State of Taxes" :rant:

but...but....there's no state income tax :roll:

All not having a state income tax does is save the hassle of filling out a form. Since there isn't one they are going to stick to you in other ways. All gov'ts are going to get their money, they just all use different ways to skin the cat. Now of course I do not want a state income tax added because all they would do is add it on top of the existing tax burden while granting some piddly tax "relief" to make you think the medicine tastes better.

[Beach]

but...but....there's no state income tax :roll:

All not having a state income tax does is save the hassle of filling out a form. Since there isn't one they are going to stick to you in other ways. All gov'ts are going to get their money, they just all use different ways to skin the cat. Now of course I do not want a state income tax added because all they would do is add it on top of the existing tax burden while granting some piddly tax "relief" to make you think the medicine tastes better.

This is really the truth. For instance, Alabama has low property taxes, yet it has a state income tax and sales tax on just about everything that can be taxed, including items bought and sold over the Internet.
The Gub'mint gonna get their share, that fo sure!

[Waco Kid]

Great, I'm probably going to buy a used BMW from a close relative soon. I bet the government value is lot higher than what I'll actually be paying. Personally, I don't think sales tax should apply unless you're doing it as a business.

[GetBent]

Great, I'm probably going to buy a used BMW from a close relative soon. I bet the government value is lot higher than what I'll actually be paying. Personally, I don't think sales tax should apply unless you're doing it as a business.

This one sounds easy to get around. Close relative, in the same state? Then just leave it in your relative's name. Right?:zen:

[mikeintx]

i thought they changed it back to the old way cause ...well it was on the news a few months back they said they had some 1200 family members selling car to eachother in 6 months instead of of 12 the year b4..

[Waco Kid]

This one sounds easy to get around. Close relative, in the same state? Then just leave it in your relative's name. Right?:zen:

That's a thought. I once bought a car from my brother and didn't bother transferring the title for years until I moved from Missouri to Texas.

[Texastan]

I just checked my presumptive value and I'm going to have pay taxes on 2,000.00 more than what I paid for the bike. Man that blows.

For those that are conspiring to register in another state but drive it in Texas, be aware that Texas state law requires you to register you vehicle within 30 days of establishing residency.

[Waco Kid]

For those that are conspiring to register in another state but drive it in Texas, be aware that Texas state law requires you to register you vehicle within 30 days of establishing residency.

Yeah, and you're supposed to update the address on your drivers license within 30 days of moving. I only missed by about 9 years. :uhoh:

[donroger1]

Just for the record!
You pay tax on 80% of the "presumptive value" or actual sales price, whichever is more.

[copusrider]

I left Massachusetts when I was 18 because they taxed everything...it took 27 years for Texas to catch up but Rick Perry has been very effective in taxing smaller groups Builders, Electricians, Hunters, Car Buyers...the list goes on. This way you avoid the backlash of large organized )and publicised) opposition.

I write and fight our elected officials all the time and am shocked to see how "out of touch with reality" they really are? It is scarey

[JR]

Just for the record!
You pay tax on 80% of the "presumptive value" or actual sales price, whichever is more.

Hummm... Having just exited the "Haggling" process and come in UNDER the presumptive value.... a new "negotiation technique" just came to mind. Check the presumptive value, shoot for a buy price of no more than 75% of the PV of the vehicle... PV is probably just about as close as NADA, KBB, MCN, EDMUNDS etc. in real world dollars.

JR

[Greg in H-Town]

I wonder if there's any way to request an appraisal before paying a tax on anything above what you paid for it? According to this link (http://www.dot.state.tx.us/services/vehicle_titles_and_registration/std_presumptive_value.htm), the odometer reading is not used for motorcycles. So we pay the same tax on a bike with 50K miles as we would on one with 1K? What about one that's sold as-is and needs a lot of work, but doesn't have a salvage title? Or one that was laid down but not totalled by an insurance company?

The only mention I can find regarding protesting the value is "State sales tax is regulated and enforced by the Texas Comptroller of Public Accounts, which can provide more information about tax rates, vehicle appraisals, etc.". In other words, they'll be happy to explain why they're hosing you, but they've already made up their mind about what you're going to pay.

edited to fix the link ...

[Beach]

I was told by the clerk while she was explaining the presumtive value tax, that if I didn't agree with the amount of the presumptive tax price I could get a written appraisal from a licensed dealer and present it as proof of the bike's value.
However, as it was late afternoon and I wanted to get the process finished, I didn't ask how the process worked or what would be used to determine which was the correct value.

[STryder]

This one sounds easy to get around. Close relative, in the same state? Then just leave it in your relative's name. Right?:zen:


Hope it's a real close relative 'cause if you hit a school bus full of nuns (or even worse, a school bus full of lawyers), both you and the relative are gonna be held liable.

That'll make for some interesting family reunions.

[jka134]

I think that since the sales tax was originally paid further taxes should not be due! If the object (motorcycle) is sold from person to person enough times the state will have collected more tax than the value of said object?:trust:

[Littlejohn64]

I think that since the sales tax was originally paid further taxes should not be due! If the object (motorcycle) is sold from person to person enough times the state will have collected more tax than the value of said object?:trust:
This has always been the thorn that sticks me!!! I agree!

[bigdadjohn40]

Say you bought a few items at Wal-Mart that added up to $100.Then when you went to pay they told you you would have to pay extra tax because some of the items were on sale and worth more than you paid,there would be great outcries and probably riots.This is exactly what TX is doing.
I agree that it is hosing the people.

[connick]

Great, I'm probably going to buy a used BMW from a close relative soon. I bet the government value is lot higher than what I'll actually be paying. Personally, I don't think sales tax should apply unless you're doing it as a business.

I'm pretty sure that family can gift vehicles to each other. Its not considered a sale, and thus, no sales tax. Then you could of course happen to give them a wad of cash as a thank-you for the gift... all you'd have to do is pay the title transfer fee, I think.

Not something I would do with stranger, as without a bill of sale, you have no legal recourse if something goes funky. Within family, though, it shouldn't be a problem [This statement probably doesn't apply to all families. Carefully evaluate yours before taking said advice ;-)]

See: last question under 'vehicle titles' section: http://www.dot.state.tx.us/frequently_asked_questions/vtr.htm