I'm thinking of purchasing a used vehicle from a private sale. Purchase price appx. $30,000. Upon registration at the DMV, I know you have to pay a tax. Can you and the seller agree to list the sales price on the transfer form substantially lower than the actual sales price (say $20,000) so that you don't get stuck with paying too much taxes. I would imagine that going too low would sound alarms at the DMV. How much are they in the lookout for that sort of thing? Thanks for your answers!
That's considered fraud. Just last week in Missouri, the police broke up (arrested) a group of people who were helping buyers register vehicles at a lower price than the actual sales price. The police here are now pursuing the people who used this "service" for the back sales tax. People who do this, even if they get away with it, are depriving their local government of the funds it needs to function and to respond to the public. In other words, if enough people cheat, then the broken road in front of your house and your neighbor's house won't get fixed. Finally, why don't you try the "newspaper test" to see whether this is something you should do. Imagine that your newspaper published an article describing what you did. Would you still do it?
The questions is why should a car be taxed 2X, 3X etc? Tax was already paid on it the first time. I don't think it should be taxed again. Here in IL you pay a use tax (flat rate) on it. Depending on the year of the car and value you pay a lower use tax. I still don't agree with it. But, it is better than paying full tax on it. I know in GA you don't pay and tax on a used car if you buy it from a private seller.
What happens if the car is totaled in a wreck? How will you explain to the insurance company that they really should pay you $30K even though you only paid $20K for the car? The rights and privileges of citizenship come at a cost. Pay your taxes.
That's exactly what the state is thinking when it levies completely unfair taxes on the public top be squandered away. If a car changes hands 3 times in the first 5 years of its life, the state collects about 25% of the total cost of the car. That's on top of the gas tax, the insurance tax and all the other taxes associated with operating your car in California. Pair that with the crazy registration fees and it amounts to straight up extortion.
To answer your question, they probably don't have anyone that goes around inspecting private party sales vs. value. In theory, if a $30k car sells for $20k, then it's worth $20k and no one can argue that. However, if they did more digging and found out that $30k changed hands and you guys agreed to list $20k, then there's a problem. But, again, I don't think they have anyone to do that. There's always a risk involved. If the car is totaled in a wreck, what you paid for it has nothing to do with how much the insurance company will give you. The insurance company claims department will handle all of the market valuation of the vehicle. They don't ask for your window sticker, sales agreement, or anything like that. You get what they give you, end of story. :focus:
Everyone else has mentioned ethics and value of your vehicle. Here is some simple economics: CA Sales tax on 30000 is about 2500 CA Sales tax on 20000 is about 1700 For $800 bucks I'd just negotiate it off the 30000 and play it by the book.
NVM just saw OP is only 1 post. Perhaps a troll working for uncle sam to catch people advocating tax fraud?
