Tax question about buying an out of state car

[jtvang125]

Seems most people say you pay the tax when you register the car. I find it hard to believe that the out of state dealer would exempt the tax and let you pay it in your home state. Also, what if the state you're buying in has a higher tax rate? I'm guessing that's just something you'll have to live with if you really want the car right?

 

[unokitty]

I haven't bought a car from out of state. But I did buy a motorcycle while I lived in Japan. Later, after I returned, I brought the bike back as well.

I didn't pay any sales tax. But in order to register the motorcycle in Illinois, I had to pay something (Might have been called a Road Use Tax) before I could register.

I remember that it was more than I wanted to pay. But I can't remember how it related to the equivalent sales tax.

Probably would be prudent for you to research this in your state prior to making any purchases.

Best of luck,
Uno

 

[jlee]

In my experience, if there's tax it is paid upon registration. There's no sales tax on private party sales in Arizona, and New Hampshire didn't have sales tax at all. IIRC in Vermont sales tax is paid on registration (otherwise people would just buy cars in tax-free NH).

 

[amdhunter]

I paid the dealership for NYC tax when I bought my car in NJ.

 

[Pens1566]

Usually, bordering/nearby states have some sort of reciprocal agreements when it comes to sales tax on vehicle purchases. You'd pay it at the dealer, then just have to show proof it was paid upon registration.

 

[DeviousTrap]

I've done this many times and the answer is "it depends".

In some states, the dealer will collect it and pay it to your state. In others, they won't charge you and you'll go to the DMV and pay it yourself when you register the car. If the dealer charges you, you will be charged the tax rate of the state where the car is being registered, not the state that the dealer is located in.

In no way will you be penalized and have to pay tax twice. The only tax owed is to the state where you're registering the car, the only difference is who collects the money from you initially.

 

[JCH13]

Seems most people say you pay the tax when you register the car. I find it hard to believe that the out of state dealer would exempt the tax and let you pay it in your home state. Also, what if the state you're buying in has a higher tax rate? I'm guessing that's just something you'll have to live with if you really want the car right?

Having bought a car in Colorado while living in NH I didn't have to pay any Colorado tax. I just paid my registration fee at the NH DMV. No big deal.

 

[Zenmervolt]

Seems most people say you pay the tax when you register the car. I find it hard to believe that the out of state dealer would exempt the tax and let you pay it in your home state. Also, what if the state you're buying in has a higher tax rate? I'm guessing that's just something you'll have to live with if you really want the car right?

You will pay use tax when you title the car in your own state unless there is a reciprocal agreement between your home state and the state in which you bought the car. You want to make DAMN sure that such an agreement exists before you pay tax at the dealer because otherwise you'll pay tax twice, once at the dealer and once when you title the car in your home state.

Most dealers will forgo collecting the tax if you don't title the vehicle at the dealership because they know that you'll have to pay the tax when you title the vehicle yourself. There may be additional state or local surcharges that are independent of registration taxes and you may have to pay those, but the big tax is paid when you register the car.

ZV

 

[uclabachelor]

Seems most people say you pay the tax when you register the car. I find it hard to believe that the out of state dealer would exempt the tax and let you pay it in your home state. Also, what if the state you're buying in has a higher tax rate? I'm guessing that's just something you'll have to live with if you really want the car right?

You pay taxes in the state you register the car. Simple as that.

 

[ViviTheMage]

Seems most people say you pay the tax when you register the car. I find it hard to believe that the out of state dealer would exempt the tax and let you pay it in your home state. Also, what if the state you're buying in has a higher tax rate? I'm guessing that's just something you'll have to live with if you really want the car right?

car tax = road tax ... if I buy a car in PA, I won't be driving in PA...it will be driven in my home state, MN...makes sense to me!

It is what i've done the last few cars I purchased out of state.