OT - Tax on a Used Vehicle--Need Advice

[Nickshu]

Bought a used vehicle (non-Porsche) about 8 months ago. The vehicle had some problems which both the seller and I knew about, so I got it for significantly less than its retail value..."as is."

I just received a letter from the State of WI saying they were performing a "vehicle use tax audit" and noticed the amount I claimed/paid tax on the vehicle was significantly less than the "average retail value" and asked for a copy of a cashier's check used to pay for the vehicle, or an "official" bill of sale. They also said if I do not submit one of these, they will charge me the tax at the full retail value of the vehicle!

Well I paid cash, and the bill of sale I have is little more than a hand written sheet saying only the year/model and "as is"...nothing official at all.

Any advice on how I should handle this? Any lawyer types out there who want to comment?
I have 30 days to reply.

Thanks!
Nick.

[island911]

Hire a lawyer. They know the game.
I would say a bill of sale is as official as need be for that type of transaction. . .but then I'm not the one inventing the rules.

[LeeH]

A handwritten contract is as legal as one on embossed paper. Just submit the bill of sale that you have. If the state is skeptical, they'll contact the seller who can verify your story. It seems that the burden of proof is on the state.
If they persist, contact your state representative and explain your situation and request assistance in putting the matter to rest.

[Kevin Stewart]

Just send them a copy of what you have, it would be better if you knew a notary public, Kevin

[campbellcj]

You might be enlist the seller of the vehicle to give you a little better documentation, if you can still track him/her down and think they might take a few minutes to assist.

However, if you have a signed, legible bill of sale then you should be fine. Last time I checked, there was no law against paying cash (or trading/bartering for that matter) for a vehicle, as long as you have documentation for the agreed-upon amount.

Good luck,

[pjv911]

Use your handwritten paper and stick to it. If there are any difficulties it might pay to bring any receipts any investments put into the car to prove that the car was not up to standards at time of purchase resulting in your lower purchase price. Here in New York we can fill out a gift affidavit resulting in no tax owed at all.

Kurt Williams

[Dantilla]

I just picked up a 944 with a seized engine. To make sure I don't have any problems, we wrote up a Bill of Sale that states "Car does not run- Engine seized." and even though I bought the car from a guy I know, I got a casheir's check for him, just so I have a copy, to comfirm the price with the DMV.

Hope it goes well for you, just an idea for next time.

[cstreit]

A handwritten note, as long as it's signed, is still a Bill of Sale.

[david c.]

I'm a law student, and was taught contracts by, supposedly, the greatest living contracts guru in the country-John Murray-anyone ever heard of him?

Well, I guess that says I should have learned enough to be dangerous.

In my OPINION, your bill of sale will be sufficient to resolve the dispute. The real contract occurred when you and the seller agreed on a price and traded money for the item. The bill of sale is just the memorialization of that, assuming it is accurate.

The notice you received was the result of the state trying to crack down on those people who (can you imagine) try to defraud the state by claiming they paid less for a taxable item (used car, instantly) than actually was paid.

Unless your state taxes you on the actual value of the sold item (never heard of that anywhere), then you are okay.

Think about it, you are telling the truth on the bill of sale, right? Then, that is the amount upon which sales tax is computed and due. Unless you purposefully named a smaller amount than you actually paid, then I'd say you are okay.

Sometimes, where transactions are gratuituous (like between a father and son) the state just exempts the transaction even where the sale price is claimed to be nominal, like a dollar.

However, where gratuitous transactions occur between non-relatives, the specter of fraud rears it's head and the state wants to know why Joe Blow would sell you his Porsha for less than the 15,000 everyone knows an 84 944 is worth.

Just send them a letter explaining the car's condition, include a photograph of the car and repair receipts of work done since purchase. Send a copy of the bill of sale. That should shut them up. But, even if it doesn't, I'd bet you win this one. There's really no issue unless you defrauded the state by not paying tax on the actual sale price.

Good luck

[island911]

Originally posted by dave cardone
I'm a law student, and . . .
Just send them a letter explaining the car's condition, include a photograph of the car and repair receipts of work done since purchase. Send a copy of the bill of sale. That should shut them up. . . ..

Good luck

Yes in this country you are guilty until you prove yourself innocent.
hmmm. . .something isn't quite right here.

[John Brandt]

GREEDY F'N B@STARDS!

[Dantilla]

Just learned something- Went to the DMV to transfer title of the 944 with the seized engine- Bill of Sale in hand. The state of Washington has a special form- "Declaration of Buyer and Seller Regarding Value of Used Vehicle Sold". Same info as on the Bill of Sale, but the state wants it on their form, or I pay tax on market value. Time to go get another signature. Glad I live close to the seller.

[david c.]

I agree with those that feel this is not unlike being "guilty" until you prove yourself innocent. There is no determination by a court that you have defrauded the state before they attempt to levy another tax on you.

That said, just because it is the regulation or the required form right now does NOT mean that it is fair.

Dantilla, if you really were mad about it, talk to a local attorney and see if it's worth litigating the matter. Sue the taxing authority over the issue.

You could single-handedly be responsible for the process being overturned in your state on the principles discussed in this thread. Of course, you are unlikely to do this. And, any local court is probably unlikely to give credit to your argument. Authority to do this has likely been delegated to the taxing entity by the state legislature and the lower courts, methinks, will not overturn this.

The problem is, in this bureaucratic society, no one wants to fight over the money-hungry government creeping ever so slowly into our everyday lives. I think it's better to pay the bill for a good attorney than to hand over the cash mindlessly to the government.

I wish you luck!

David

[pwd72s]

David, Just wanted to thank you for this information. Some time ago, my wife & I decided to give our daughter a boat. We in Oregon, she in California. Almost as a joke, I typed up a "bill of sale", selling her the boat for $1. She later said that "joke" was valuable when she licensed the boat in California. Now I know why.

[Porsche911NYC]

For future reference, should one decide to purchase a vehicle with a fairly significant price tag and are afraid of getting walloped in the pocket with these redundantly ridiculous sales taxes (wasn't the tax first paid when the vehicle was new?), simply pay with 2, or even 3, Cashier's Checks (evenly divided, of course to sum the total price). This way when asked to produce a copy of the Cashier's Check, you'll have one to show them.

[rscupper]

Yes NYC, I'm sure 'a' tax was paid when sold new; however, taxes are applicable every time property is transferred to a new owner. I would guess, legally (certainly not morally) taxes are owed to Big Brother every time you happen to purchase personal property from, say, a garage sale or from a classified ad.

The only reasons the gov't jumps on vehicles are 1) because they can. Vehicles must be registered. Registration can be held pending payment of the tax (can you say extortion?), 2) if it is not legal to tax the transfer of such personal property in a state, the gov't will instead create perfectly legal 'fees' and, 3) there's alot of money involved in vehicle sales. What gov't in the U.S. can resist tapping a market that can produce enough taxes and 'fees' to fund the self-pertuating bureaucracy created to collect the funds?!. Yep, it's sad.

[david c.]

For future reference, should one decide to purchase a vehicle with a fairly significant price tag and are afraid of getting walloped in the pocket with these redundantly ridiculous sales taxes (wasn't the tax first paid when the vehicle was new?), simply pay with 2, or even 3, Cashier's Checks (evenly divided, of course to sum the total price). This way when asked to produce a copy of the Cashier's Check, you'll have one to show them.
_________________

That, my friend, is the exact type of fraud that is being investigated. Granted, this may work upon a cursory investigation of the transaction by the taxing authority. Of course, there will be record of your withdrawal(s) at the time of the sale. If I were the investigator/prosecutor, I'd just ask for the checks or account records immediately before/after the purported payment note to see if more than one draft or cash was utilized by the purchaser.

Do I agree with the tax? No, of course not. But, I'd advise paying it or fighting it legally rather than subjecting oneself to criminal liability for tax evasion. The cost/benefit analysis favors compliance, in my opinion.

[tight as a bull's ass]

The state has the money, power and make the rules

Now YOU have to prove your innocence or YOU have to pay what the STATE has decided you owe them.

That's how it works....it's all BULLSCHIT tactics to increase revenue for the state by ripping off hard working people, as if paying all those godammn taxes were not enough.

Move to another State, man.

[Nickshu]

Thanks for the tips guys.

Les Paul...I'll be moving to another state in August...no problems there!

Nick.

[david c.]

Nick,

Just for the record, was it at least an interesting car? Tell us about it.

David