Certified letter from Illinois Dept. of Revenue

[tharbert]

The Illinois Dept. of Revenue sent me a tax bill for the 72 911T barn find I picked up in the spring last year. Apparently, when you pay the taxes based on the price you pay, some pencil pusher reviews the transaction and if they think you didn't pay enough, they can you a bill for the difference.

Well, the bill was for $1350, about $350 more than I paid for the car in the first place. According to the tax chart, they value the car somewhere between $22K-$25K.

So, how do you legally evaluate the worth of a 37 year old car? It's not like you can look in Kelly Blue book for a reasonable starting point. When I picked up the car, there were obvious rust issues, the motor hadn't been started in 8 years, tires were trash, there were mice nests inside the car and the engine and did I mention rust issues? I guess you could call it a roller with potential.

So, what's the ballpark "worth" of a car like this?

[tonythetarga]

Something you might want to look into as every state is different. In New York, if you buy a vehicle for less than their book value for taxation purposes, the only way around it is to have the seller verify the sale price (seperate form) and you present that to the DOT. I had to do that on a purchase a couple years back and it worked for me.

[pozee]

+1 on seller verification.

This is strange. Not up on IL law, but you pay taxes on actual purchase price and not on value in most states.

The seller is usually contacted first to see if they verify the price you claim you paid.

[MotoSook]

If the reported price was true, I would think you should be fine. I would send a copy of the cleared check or the cashier's check carbon copy with pictures of the car indicating it's condition at the time of purchase. List the items that need replacement and restoration with estimated cost to restore or replace. Send all that in to the state and follow up on it. When they realize that the cost to restor the car may be more than what they value it, they'll likely give up.

[vreference]

http://www.revenue.state.il.us/Publications/Sales/STS76.PDF

From a private party, if the vehicles purchase price (or fair market value) is below $15,000 and the car is 11 or more years old, your pay $25 in tax.

The key phrase here is "fair market value" and they think they caught you. I suspect your purchase price actually is very close to the fair market value of the car.

RUT-50 reporting facts page states Illinois has the authority to "determine fair market value" if they feel there is a discrepancy.

Unfortunately I didn't find anything about disputing this but I suspect all you need to do is send them a letter with a picture enclosed.

[Wayne 962]

I may have the same problem with the 1999 996 I just bought for $10K. I'm just expecting CA DMV to flag that one. Although I will probably non-op it when I register it, so that may decrease the likelihood of an "audit".

-Wayne

[ruf-porsche]

I was under the impression that Illinois charge a flat tax fee of $50.00 for any car that is over 10 years old.

[vreference]

Originally Posted by ruf-porsche

I was under the impression that Illinois charge a flat tax fee of $50.00 for any car that is over 10 years old.

No, it changes at the $15,000 mark and that's only for private party. I paid approximately $1000 in tax when I bought my '89; I was thinking I was going to slide in under the $15K mark and owe a couple bucks, only to find out that that's not how it works when you purchase from a dealer (not mentioned on the Illinois DMV website.)

[cgarr]

Had the same problem 20 years ago when I built my SE5a Aircraft, the state sent me a tax bill for around 10k when I registered it, I took in all my receipts, many which I already paid sales tax on for materials too, totaled them up and gave them a check for 15 bucks.

[kodioneill]

in new york they tax a car every time it is sold no matter how many times it changes hands. if you think that's bad, wait till global warming taxes start. sorry to post that on a non political forum but i just can't help it.

[CRNT918]

Ran into the same problem TWO YEARS AFTER I bought the racecar. Didn't have any real documentation as I bought it from a friend. Seller even sent "Mary" a letter with a copy of the bank deposit. No luck, no sympathy, just nasty letters from "Mary". Wound up paying them tax PLUS interest, otherwise they were going to put a levy on my house. When it comes to the government, YOU are guilty until YOU prove yourself innocent.

[ruf-porsche]

Originally Posted by vreference

No, it changes at the $15,000 mark and that's only for private party. I paid approximately $1000 in tax when I bought my '89; I was thinking I was going to slide in under the $15K mark and owe a couple bucks, only to find out that that's not how it works when you purchase from a dealer (not mentioned on the Illinois DMV website.)

Well that's were you made your mistake, you purchase from a dealer and they charge the full sale tax on the final negotiate price of a car. I brought my 82 SC Targa from a private party and went to the Secretary of State Office to transfer the title and pay my $50.00 for the revenue tax.

I was able to negotiate a reduction on my BMW from a dealer when I mention that if I brought the car from a private party I would not have to pay quite as much in sale tax.

The original poster said that he paid only $1000.00 for the car. A bill of sale stating the price is all he will need to get the revenue tax reduce.

Illinois like many states are in a bind to make up revenue lost to sale tax, gas tax and property transfer tax. They are hoping that most people will just roll over and pay the tax and not bother with a protest.

I would like to see what will happen to our property tax when they ask for money and the property is worth less according to all sources.

[Dantilla]

When I bought the 944 that is now my race car, I wrote a Bill of Sale stating:

"Car does not run. Engine siezed. No wheels or tires."

The seller was glad to sign that (because it was true), and I had no problems with the DMV paying the tax on only what I paid.

I recently sold a Jeep. I included a picture on the Bill of Sale.

[dmcummins]

I have to pay personal property taxes every year on mine. They have my 73 listed as a turbo and my 71 911 listed as a 912. I called them in the past and tried to get things straight but finally gave up. They have the market value of the 912 higher than the super rare 1973 911 turbo.

[GothingNC]

Wow, that's a huge tax bill !

NC bases tax on FMV from private party and 3% on bill of sale based on sales price from a dealer.

Only had to pay $78 tax for my 82 Targa 3 years ago.

[hammerhead222]

Here in Taxachussetts i get screwed on anything over 20 years old. nada and kelley dont agree on values at all and if my 87 were a year newer when i bought it in 2008, i would have saved a bunch because mileage was high. plenty of stories of tax paid on $10k 356's with $30k book/tax values. at least salestax is still only 5%

[tharbert]

I did indeed pay $25 in tax. On the form they sent, that $25 wasn't even subtracted from the insane amount of tax they think I owe. To add insult, they tacked on $123 in late charges for a a bill they just sent. That's my tax dollars hard at work!

I'm headed to a local used car dealership to see if they can "evaluate" the car. I suspect they will agree that it's certainly not worth $22 large. Maybe when I get done with it!

[gulf908]

...they value the car somewhere between $22K-$25K....

This may just be an outside observation but why dont you take a good number of pics of the neglected state of your car and send them back to the revenue collectors asking how they arrive at a value of $20k plus ??

Cheers,
Dennis.

[ljowdy]

The extra money if for your "former" Governor and was used to help finance the campaign expenses of your future President.

Documentation is the key. Take photo's of the car highlighting all of the deficiencies such as rust, engine, interior, mice nests etc and then compile a letter to your corrupt State.

Include 5 x 7 photo's as they show much better than 4 x 6 photo's.

Indicate that you know they are mistaken and tell them to "prove" that your car is worth that amount of money. In fact, include in your last sentence that you are willing to go to court with a jury to prove your point and, a jury of your peers, after reviewing the car will undoubtedly side with you rather than the State.

[3.2 CAB]

What type of value do you have it insured for? The "tax man" whether it is local, state, or fed, can pull more crap and get results, because of their power to turn your life to hell, even if it is not you that made a mistake.

I had a similar problem come up, I had purchased a new vehicle, and I was also moving at the same time, so I did not do any of the paperwork for the state that I bought the car in, and that I was moving out of. I had all of the proper paperwork, and the certificate of origination when I went to register the car in the new "home" state. They wanted to charge me the taxes for what their computer said the value of the new car was, and told me I owed $$$$$, I brought it to the attention of the clerk, that the figures on my paperwork were not the same amounts as her computer was showing. The bill of sale and all the associated paperwork indicated the total amount that I paid for the car, and then she used those figures to determine the tax amount. This was fairly large difference between the two figures, but she also told me, that if I did not have the bill of sale with the actual price I paid for the car, they would have used the states computer generated amount, and basically I would have had to pay about $1500.00 more than I finally had to pay.

Hope you can get it worked out! Tony.