Re: Lic. Plate

[LToy@aol.com]

In a message dated 95-12-08 13:53:59 EST, you write:

[SNIP:  scenario of selling your car for $1 to pay only $.08 in sales tax]
>
>Even if you did it really honestly and truly legitimately, the local RMV
>(that's the "Registry...") look your car up in a book and nail ya for
>their arbitrarily-ascribed value of the car if your stated value is too
>low for their tax coffers. Of course, they'll happily accept your higher
>valuation!

Actually, there's two different tax issues here, at least for us
Washingtonians.

1st, there's the one time "use tax" or sales tax on the transfer of the car.
 Sales tax applies to retail sales, use tax to a private transaction (state
wants their money, it's the same rate as the sales tax).  If you can honestly
prove you only paid $1 for the car, you'll pay use tax on $1.  For each car,
there is an acceptable sales price range you can allege that will be accepted
without further proof.  If you are below that figure, you'll have to offer
additional proof/justification, i.e. car doesn't run, sworn statement from
seller (beyond bill of sale), etc.  I'd guess there's a bit of abuse of this
for the lower end private transactions--like giving the seller two cashier's
checks and showing the receipt for only one as the "amount" paid  (actually,
the kid gave me $2400 in cash and a $5000 cashiers check)

2nd, is the excise tax for annual licensing purposes.  This is based on a
depreciated figure from the original base list price, at about 2.25% here.
 Here, it doesn't matter what price you paid for the car, you're going to be
taxed on this scale.  So, we Audi owners get scr*wed while cars that really
retain their market value do better.  

--ldt