Tax department wants more $ for my purchase???
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  1. #1
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    Tax department wants more $ for my purchase???

    Picked up an 2002 Passat GLX 61k miles for 10500. I just recieved a letter from the tax man saying that the value for the car is 18k and wants $600 more in taxes. I already put close to 2k in for timing belt, brakes, flush the works. Does anyone know how to fight this? I'm located in Monouth County Freehold NJ area. Thanks people

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  3. #2
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    Tax is paid on the money spent, not the "estimated value". Unless NJ has some weird resale laws, I would ask for clarification of why they are assessing tax on the estimated value. This almost sounds like some scam or a paperwork glitch. It may be worth $18k, but that isn't what you spent.

  4. #3
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    I paid the same for my '01 GLX B5.5 5spd with 53k on it and the notary in PA said the state has the opportunity to tax you on actual value rather than what you paid unless specified problems exist with the car. You should have stated on the title that it needed the timing belt work and even made up some other things like noting small scratches, control arm issues, etc.

  5. #4
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    more more more $$$ for taxes

    Thats correct however it's on official Doc. Don't know how to go about fighting this? They want me to go back to the seller and have something notorized. I don't want to hassle the seller now months later.

  6. #5
    is a sweetheart
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    It depends on if it was a private sale or a retail sale of a used car. In CT, a dealer will collect the tax on the price paid at the time of purchase if it's a retail sale, if it's a private sale then you pay the tax on the assessed value (which surprisingly is usually less than the actual value) when you register the vehicle. If the purchase price is actually lower than assessed value then you will probably need to provide justification as to why the purchase price is lower; for example I bought a truck which needed some body work and provided pictures of the damage as justification, the state then refunded my money.

  7. #6
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    Problem lies in that the car looks mint however I needed to put a bunch of preventative work totaling close to 2k. How do I present my case? $600 bucks is way too much to pay for the difference.

  8. #7
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    wait they want to tax the money you didn't spend? that's crap.

    i know when i bought my b5 it was 2000 under what was considered the value of the car. the DMV lady said that i would need to pay extra or have the (private) seller sign the old title (i think i was title) and state the price sold for..

    But this is in VA

  9. #8
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    If you paid $10,500 for the car, then get the seller to sign a notarized statement (or DMV's form if they have one) indicating that seller received $10,500 cash from you as value for the car. Don't know NJ law, but if seller signs you'll probably be okay. My guess is since you paid less than 60% of the retail value, yours got kicked out for follow up. NJ is probably just trying to collect from those who significantly understate what they paid for the car sometimes in collusion with the seller.

  10. #9
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    I bought my 99 V6 stick at $5k, and the DMV told me that it was appraised at 12K, and sales tax was gonna be 500!!! I told them that wasn't happening. They had me go get it appraised, and the guy took KBB low value (7.2k) and subtracted a grand for some body imperfections, and another thousand for the manual (2nd best part of the car, behind the engine, in my opinion), so I ended up with an appraisal of 5200, much better. They take the highest end price they can get away with and try to steal your wallet. A$$holes!

  11. #10
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    I've never understood how they justify taxing a used car when it was already taxed when new. Some states make you pay tax when you move registration from another state.

  12. #11
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    to save your butt, never pay in cash, but rather a certifed bank check or money order for the lower price. have everything copied, signed by the seller, and notarized if necessary. in PA, the seller has to fill out a form stating the purchase price, but if you know the person, it's cake.

  13. #12
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    Just think how much money is made by the state on one vehicle. Every time that vehicle is sold TAX is paid!
    NJ started this crap years ago! As the saying goes NJ and you "perfect" together

  14. #13
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    Thats bogus... and the truth is probably closer to what
    kenblasko stated in regards to fruadulent behaviour from
    others thus leading to this??

    Could be worse. Here in Maine I have to pay "excise tax" every year.
    I think it was about $550 for my first year in 2000 and that's in addition
    to my sales tax when purchasing (another 600-ish!). And EVERY year
    I have to pay this **$##fuggiingggirrrratttteetax!!! It does go down
    every year however... for example I think I paid about $200 last
    year... big woop.

  15. #14
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    Quote Originally Posted by enjoi_30v
    wait they want to tax the money you didn't spend? that's crap.

    i know when i bought my b5 it was 2000 under what was considered the value of the car. the DMV lady said that i would need to pay extra or have the (private) seller sign the old title (i think i was title) and state the price sold for..

    But this is in VA
    ditto that. i bought my 99 for 13k years ago, they would tax me on 15k or 16k (can't remember now) same as your situation.

    call the seller and explain, i'm sure they will understand and help you save the $600.

  16. #15
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    Quote Originally Posted by kenblasko
    If you paid $10,500 for the car, then get the seller to sign a notarized statement (or DMV's form if they have one) indicating that seller received $10,500 cash from you as value for the car. Don't know NJ law, but if seller signs you'll probably be okay. My guess is since you paid less than 60% of the retail value, yours got kicked out for follow up. NJ is probably just trying to collect from those who significantly understate what they paid for the car sometimes in collusion with the seller.
    In Ohio, they tax you on the value you put on the title when you sign it over. Unless you put some ridiculous amount in there, that's what you pay tax on.

  17. #16
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    thats what they do in FL but only on private not dealer sales..i bought a S10 with no engine and they tried to charge me tax on 4500 (blue book) but i only paid 500 for the truck....just get all the paperwork stating what you DID pay get it notorized and bring the person you bought the car from and the bill of sale title and etc...youll win.

  18. #17
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    I don't know whats up with your staes. Personally i haven't bought from a private seller but my dad has many times and here in Illinois they don't tax you on private sales.

  19. #18
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    MA collects tax on the higher of the sales price or the NADA value..UNLESS the seller is registered with the state. Doesn't matter if you have a bill of sale either...it is to prevent tax cheats although in situations like this it is another classic law hurting the wrong people...like AMT for cars.

    I'm assuming you'll need to pay up, or maybe the'll freeze your licence or registration or something.

  20. #19
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    TAX TAX and More TAXES

    Thanks guys for all your input. I'll try to find the seller and see if he can help me out. If I can't locate the seller then what? Thats the ticket.

  21. #20
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    You should have some sort of proof that you paid him $10,500 (bank slips, credit cards, checks, etc). Just show that as proof along with the receipts of your repairs. You'll fbe fine.

  22. #21
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    Was this just sales tax? In Kentucky, you pay sales taxes and also yearly ad valorem taxes (taxes on the value of the vehicle.) In Kentucky you pay sales taxes when you purchase a car, then the "value" taxes afterward. Perhaps your state is different, and assesses both at the same time? Of course, many states, as previously stated base sales taxes on pre-determined values to prevent the sweetheart deals to evade taxes; e.g. saying a purchase was substantially less than it was to avoid taxes. In that case, some notarized statement may be of some help. Just about every taxing jurisdiction has a method for appealing assessments.

  23. #22
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    NV you pay sales tax on the KBB value of the car. It used to be what you paid for it but a few years ago changed it when too many people were selling cars to thier friends for a $1 or some other stupid amount to save on paying the tax. sorry just thought i'd throw that out there.

  24. #23
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    Quote Originally Posted by zuren
    Tax is paid on the money spent, not the "estimated value".
    The actual value was what you spent. You've got proof. That should be the end of the story, yes. This sounds like an exhuberant tax dude about to get his finger caught in the cookie jar.

  25. #24
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    Money due:(

    Just looking back on thread here and was wondering if anyone from NJ area had same issue and what exactly was the outcome. Thanks again

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