Buying a used car and I have a state sales tax question

[Ballygrl]

My Husbands Aunt is buying a new car, she bought her current car in 2002. The car is in great shape and for us it's pure luxury, we played with all the gadgets more then spending time test driving the car, we've never had a car like this. It's in excellent shape, she had it regularly maintained and it has a little over 50,000 miles on it. We want to buy it as a 3rd car, and since it's so nice we wanted to mostly use it for traveling out of the area because it rides great and it's really comfortable.

Here's my question, hubby is her favorite nephew, we're good to her and she's very good to us, so for that reason she's selling us the car for $2,000, but the Kelly Blue Book value for the car is $6,275, so we're buying it for well below the Kelly blue book listing. I looked all over the web for info on whether or not NJ State Sales Tax, which is 7%, would apply to the Kelly Blue Book value of the car? or does it apply to the sale price? I can't find anything at all, and not sure I'm looking in the right place at the NJ DMV site. When we register the car under our name we have to pay sales tax, but we'd like to know beforehand what the DMV would go by.

Thanks!

[angelicmadrigal]

I believe it applies to how much the car was sold to you for. It's like buying something on sale at a store. It's below the actual REAL price, but you still only pay tax on what you purchase it for.

The title office SHOULD be able to answer that for you as well since that's where you pay the taxes on it when you get the title switched over.

[sgdp]

In my state, it applies to your sale price. Within my family, we sold a moped for $10 to transfer the title (and avoid the title transfer fees).

:shhh:

[LouC]

I have seen nothing that states the NJ sales tax will be based on "bluebook" value.

Sales tax
If you purchase a vehicle in New Jersey, you must pay sales tax and complete the sales tax section stamped on the title. (Newly issued New Jersey titles will have a section to complete sales tax information preprinted on the document)

* Typically, if you purchase a vehicle from a New Jersey dealer, the sales tax will be included in the sales process. However, if you did not pay sales tax at the time of purchase, you will need to pay the sales tax based on the actual amount paid for the vehicle at an MVC Agency
* Some vehicles are exempt from sales tax

For your convenience, MVC accepts American Express® card, MasterCard® card, Visa® card, checks, money orders and cash.

Click LINK (http://www.state.nj.us/mvc/Vehicle/MotorVehicles.htm)

Transferring vehicle ownership
If you need to transfer vehicle ownership you may do so at any MVC Agency. To ensure proper transfer of documents and to avoid penalties, please follow these guidelines. Business vehicles have different requirements.


If you sold or bought a vehicle
The Seller must:

* Remove the plates and surrender them to any MVC Agency or Regional Service Center, unless the plates are being transferred to another vehicle (plates can be transferred to another vehicle but not to another owner)
* Sign the reverse side of the title and give it to the buyer, with:
o Buyer's name and address
o Date of sale
o Mileage odometer reading (see below)
o Sale price
* To avoid a $25 penalty, all titles must be transferred within 10 working days from the date of sale

The Buyer must:

* Sign the back of the title and insert his or her driver license or corpcode number
* Visit an MVC Agency to transfer title, complete registration and receive your plates:
o Bring the signed title, proof of insurance and sales tax payment (see Vehicles exempt from sales tax)
* Pay $60 (or $85 fee for a financed vehicle)

Click LINK (http://www.state.nj.us/mvc/Vehicle/TransferringVehicle.htm)

[Lima India Bravo]

Another thing to check is whether you owe any tax at all. In some states, sales of automobiles to close relatives makes them non-taxable. I'm not certain if it's still true in California, but several years ago I sold one of my cars to my nephew when he came here to go to school and there was no sales tax, just a small administrative fee.

[johnrocks]

Call the DMV, it's different for different States, some have gone to the "book" since so many have done like sgdp and stated figures well below the actual transaction price.

[SFC(R)L]

http://www.state.nj.us/treasury/taxation/pdf/pubs/sales/su4.pdf

[LouC]

http://www.state.nj.us/treasury/taxation/pdf/pubs/sales/su4.pdf

That really didn't address the question.

I looked at that earlier.

[Ballygrl]

Thanks guys for all the info. I ended up calling the DMV, I was shocked that it was much easier to get through and speak to someone then I thought it would be, and she said the taxes are based on the sale price and not the blue book value :dance:

I'm so excited, this car has a sunroof and I have no idea why the idea of it is making me happy LOL.

[LouC]

Thanks guys for all the info. I ended up calling the DMV, I was shocked that it was much easier to get through and speak to someone then I thought it would be, and she said the taxes are based on the sale price and not the blue book value :dance:

I'm so excited, this car has a sunroof and I have no idea why the idea of it is making me happy LOL.

It is the collection of little pleasures in life that are like sprinkles on a doughnut which make it seem all the sweeter.

[Ballygrl]

It is the collection of little pleasures in life that are like sprinkles on a doughnut which make it seem all the sweeter.

:))

I have no idea why I'm excited over the sunroof, I think because I'll end of playing with the buttons every time we're in the car, opening it and closing it, opening and closing.

[LouC]

:))

I have no idea why I'm excited over the sunroof, I think because I'll end of playing with the buttons every time we're in the car, opening it and closing it, opening and closing.

Shades of Homer Simpson, "sunroof opens up" "sunroof closes" "sunroof opens up" "sunroof closes" "sunroof opens up" "sunroof closes" "sunroof opens up".... :))

[Ballygrl]

Shades of Homer Simpson, "sunroof opens up" "sunroof closes" "sunroof opens up" "sunroof closes" "sunroof opens up" "sunroof closes" "sunroof opens up".... :))

We'll see how long it takes hubby to yell "stop it"!

[LouC]

We'll see how long it takes hubby to yell "stop it"!

I imagine it won't take very long.

"You're going to wear the motor out, stop that"... :D

[jimjames418]

Another thing to check is whether you owe any tax at all. In some states, sales of automobiles to close relatives makes them non-taxable. I'm not certain if it's still true in California, but several years ago I sold one of my cars to my nephew when he came here to go to school and there was no sales tax, just a small administrative fee.
Here in Michigan there is no sales tax if transfered to a relative, but you still have to pay for the title transfer, which is $15.

[LouC]

Here in Michigan there is no sales tax if transfered to a relative, but you still have to pay for the title transfer, which is $15.

Wow?

Considering the budget issues of Michigan that is darned surprising. :eek:

Maybe Ballygirl and her auntie with the sunroof could move there to save some money... :whistle:

[camarozz]

Here in Washington you have a "gift" option once and then the next sale you pay a tax on the price even if it were a gift. Then you can gift it again, kind of an every other title transfer thing.

They will also charge you blue book if you come in with a $100 sale on a $10,000 car. But that can be challenged too.

[smyrna]

My Husbands Aunt is buying a new car, she bought her current car in 2002. The car is in great shape and for us it's pure luxury, we played with all the gadgets more then spending time test driving the car, we've never had a car like this. It's in excellent shape, she had it regularly maintained and it has a little over 50,000 miles on it. We want to buy it as a 3rd car, and since it's so nice we wanted to mostly use it for traveling out of the area because it rides great and it's really comfortable.

Here's my question, hubby is her favorite nephew, we're good to her and she's very good to us, so for that reason she's selling us the car for $2,000, but the Kelly Blue Book value for the car is $6,275, so we're buying it for well below the Kelly blue book listing. I looked all over the web for info on whether or not NJ State Sales Tax, which is 7%, would apply to the Kelly Blue Book value of the car? or does it apply to the sale price? I can't find anything at all, and not sure I'm looking in the right place at the NJ DMV site. When we register the car under our name we have to pay sales tax, but we'd like to know beforehand what the DMV would go by.

Thanks!

In the state of North Carolina, the tax is on the amount paid unless the price is so rediculously low that it sets of a red flag at the DMV office. If it does, you'll be at the discretion of the DMV clerk.

What you may want to do is to say you paid a little more so that it is closer to the bluebook value. Pay the tax on the higher amount but pay the price agreed upon.

[Ballygrl]

Well we're getting the car tomorrow. I can't get down to the DMV until some time next week, so we'll play with the gadgets in the car while it's in the driveway, I already got told not to break the sunroof LOL.

The car is in such good shape that we're going to carry collision on it, not so great that our car insurance will go up $700 per year, but it's too good of a deal to not say yes to it.