Re: Sales tax out of state? (archive)

No, it is a sales tax. When you buy the car out of state you tell the dealer you will be exporting it from the state and they will not collect any sales tax from you (and they may make you sign a piece of paper outlining your intentions).

Read my original message. I said if I buy it from a private party. Consider this scenario that will probably unfold several times over the next few months:

1) Joe buys M3 from dealer in State A.
2) Joe sells M3 to Fred in State B.

Who does Fred or Joe pay sales tax to at step 2? Why? Nothing in my state's Department of Transportation has anything to say about tax at registration time. They've got the whole statute on the web (and, man, it's bad reading).

The dealer collects sales tax on the state's behalf from you. The buyer pays the sales tax NOT the seller. Just like going to the grocery store, the grocery store collects sales tax and then pays the state.

Technically, the government doesn't care about the buyer paying. That's why it's SALES tax. If the seller didn't want to collect tax, they could simply not do it. They'd still have to pay the tax because they sold the merchandise. The way we all do it is to have the buyer pay and the seller pass it on to the govt, but that's not how the law is written. That's why I'm confused about what taxes, if any, need to be paid on a private transaction.

Follow Ups:

Dude...... Lazlo 11:28 1/15/2001 (2)
- Re: Dude...... Lurker 12:06 1/15/2001 (1)
  - Here you go.... Lazlo 12:32 1/15/2001 (0)

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