Stupid Question: If I buy a used car, do I pay sales tax?

HarryCaray · Oct 3, 2011

Or is the tax liability on the seller?

Ex:
Guy puts his car in the paper for 10k. I am preapproved for well over that amount. Do I just have to hand him 10k or is the bank gonna nail me on tax?

Dante · Oct 3, 2011

I think you pay the taxes when you register it in your name... on the title will have the price you paid that is the amount you will be taxed on... unless its given to you as a "GIFT" ;o);O)

billhill999 · Oct 3, 2011

Short answer:
Yes

If it changes hands, and there's cash involved, there is a sales tax

HarryCaray · Oct 3, 2011

Is it taxed at the normal sales tax rate I would pay at a dealer (6.25%)? Or is it a lower rate.

I live in Illinois.

Thanks guys.

hosnatcher · Oct 3, 2011

In California when you register the car in your name at the DMV that is when you pay for the sales tax. You bring your bill of sale and the DMV will charge you the appropriate sales tax.

HarryCaray · Oct 3, 2011

Thinking about pulling the trigger on a car I just looked at but it is close to my ceiling. I just wanna make sure to leave enough for TT&L, but am not sure how the tax works.

My cap is 10k total (but I am actually willing to stretch to 11k if absolutely necessary). The car is for the old lady BTW. This car is privately listed at 10k flat. I would like to get out at 10k flat. What do I need to offer him to get out the door at 10k. 9,250? 9?

I don't wanna lowball this guy too bad cause it is actually a very nice deal already, blue books at 10.4 and NADA value at 12.4 clean and it is in very good shape.

billhill999 · Oct 3, 2011

There are tricks (wink wink)
If you give her say, 9K cash, see if you can get the receipt made out for 7K cash.
If the buyer and owner have a mutual understanding, and there is no paper trail, you can save 2K worth of sales tax.

Dante · Oct 3, 2011

billhill999 said:
There are tricks (wink wink)
If you give her say, 9K cash, see if you can get the receipt made out for 7K cash.
If the buyer and owner have a mutual understanding, and there is no paper trail, you can save 2K worth of sales tax.

exactly tell them you bought the car for 5K as long as the seller is on board get it harry?

HarryCaray · Oct 3, 2011

It's a 2004...looks like I'd only owe $80
http://tax.illinois.gov/taxforms/Sales/VehicleUseTax/RUT-50-Instr.pdf

HarryCaray · Oct 3, 2011

Dante said:
exactly tell them you bought the car for 5K as long as the seller is on board get it harry?

It looks like the tax is based on vehicle age, not value...unless I'm reading all this wrong.

gskiman · Oct 3, 2011

Not in Montana or Oregon.
No sales tax.
(<)<

Dante · Oct 3, 2011

HarryCaray said:
It looks like the tax is based on vehicle age, not value...unless I'm reading all this wrong.

then all states are different in idaho you pay sales tax on the value.. the age is used to determine how much the registration is

I just read your link it goes by purchase price... re-read it again unless im reading it wrong

HarryCaray · Oct 3, 2011

Dante said:
then all states are different in idaho you pay sales tax on the value.. the age is used to determine how much the registration is

I just read your link it goes by purchase price... re-read it again unless im reading it wrong

If the car is over 15k it goes by value (table B), if it is under 15k it goes by age (table A). Work on your reading skills!

So this guy's full asking price was 10k, I just called and offered him 9,700 in cash and he turned it down. What a scrotum sucker.

Stupid Question: If I buy a used car, do I pay sales tax?

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