During a selling of a car or transfer of title, there is a space for "purchase price". This is the amount you will be taxed on. Does the auto tag agency know if you are buying/selling the car or simply just transfer of title. I ask because what if the stated price is low or even zero in the case of a gift or if there are other terms of the deal? Do they investigate if it's not the typical norm price?

anyone know?

thanks

 

Auto excise tax, or sales tax, varies so much from state to state, that it is impossible to give an answer that would be correct everywhere. Check with a tag agent our your DMV.

Thanks,
Richard

 

Texas does allow for gifting cars. They charge a "$10 Gift Tax" for that - it's on the form. Same for a "$5 Even Trade Tax." I have no idea how much checking they do on such title applications, however.

 

So is it really a gift, or are you just trying to get out of paying tax by using a low number? If its a sale, then they will also ask for additional documents, such as bill of sale. If the sale number is low, they will go by the book value and you will pay taxes on that number. You can however, fill out a form detailing why the vehicle was sold as a lower price and get exempt from paying the extra.

 

thanks. What about under the conditions of trade? If the cost claimed is low, would they investigate? contact previous owner? etc?

 

I don't think that these questions can be answered. Just insert the correct amount and pay the tax. A guilty conscience can (and will) get the best of you while you lay in bed at night wondering if they have found out or not. It's not worth it.

 

I always lowered my forms by a few grand. Just keep it resonable. You can't write $10k for a $40k car. But you could write $35k for a $40k car. Still saving some money, but close enough it won't be noticed.

 

[QUOTE=Elistan,Feb 6 2006, 01:02 PM] Texas does allow for gifting cars.

 

A family transfer like that should fall under the $10 Gift Tax.