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Heres a question for you guys. I'm buying a boat and I have a trade in with a clean title. How do they figure the sales tax. Do I pay tax on the cost of the boat or the amount that I gave them after the trade in. Please help as I am picking my new boat up at 11:30A.m.
I am pretty sure you pay the tax on the boat.
It should be on the difference.
You only pay tax on the difference.
Ex.
New boat 25000
Trade 10000
Difference 15000
You only pay tax on the 15000.
Here in VA you have to pay tax on it all. I bought my boat in TN and had to pay sales tax on the boat, plus the trade in of my old boat. So basically I pad tax on the old boat when I bought it and then paid some tax on it again when I traded it off http://www.bassboatcentral.com/smileys/ohwell.gif
Things are done a little different in VA then. That's the only one I have ever heard of where you pay tax on the total and not just the difference. Like you said, you already paid the tax on the trade when you bought it the first time. That sux. I was just telling you how it works here.
<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by SkeeterSX190 »</TD></TR><TR><TD CLASS="quote">Here in VA you have to pay tax on it all. I bought my boat in TN and had to pay sales tax on the boat, plus the trade in of my old boat. So basically I pad tax on the old boat when I bought it and then paid some tax on it again when I traded it off http://www.bassboatcentral.com/smileys/ohwell.gif </TD></TR></TABLE>
Something doesn't seem quite right with this transaction. I could understand paying sales tax in TN, then having to pay a use tax in VA, but not sales tax on both the new and old boat.
Its only the difference in MO (at least thats how it was on my truck, I didn't make a trade in on my baot...)
Well I believe I was overtaxed. I took delivery of the boat this morning. Any suggestions on what to do now? I mentioned this to the dealer and he said I was incorrect.
Did you buy the boat in VA, yet you live in KY?
Bought the boat in Ky and live in Ky as well.
I know with automobiles, if for instance you buy a truck that is 10,000 and you get 2,000 for your trade. You pay tax on 8,000.
I just talked to a friend of mine that bought a boat from the same dealer and he only paid taxes on the difference. I hope it was just a accident and not someone trying to get over on me. Looks like another trip to the dealer on Monday. I don't know about you guys but I can't let $667.00 go that easy.
I couldn't, nor wouldn't let $667.00 get away easily. Sounds like an error to me. Be diligent.
I know this isn't a boat but in Louisiana, when you registar an out of state vehicle to get new LA tags you have to pay taxes on the value of the vehicle even though taxes were already paid when you bought the vehicle in that state. So it could be true what he is saying.
<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by PSM207 »</TD></TR><TR><TD CLASS="quote">
Something doesn't seem quite right with this transaction. I could understand paying sales tax in TN, then having to pay a use tax in VA, but not sales tax on both the new and old boat.</TD></TR></TABLE>
I could have paid the sales tax in TN (not sure what their rate is) but when I registered the boat in VA, I would have had to pay the difference to VA. Really screwed up the way it works. It took almost 2 weeks after I purchased the boat before I could get an exact answer from the VADGIF on what I needed to pay, etc. I think the tax rate in VA was 2 or 3% but no more than $2000, or something like that.
This is a real good question. I would think that you would be paying tax on the sales price because that is what it actually costs. The trade in is basically putting money down on it. If you went to the grocery and rang up $100 and paid cash, you would still be paying tax on the $100 of goods. Let us know the outcome.
Here in MD you would be paying taxes on the selling price of the item. Now the only way to get around that is to have had the dealer nock the entire price of your trade off of the sales papers and no mention of a trade take place on paper. More or less he could have lowered the (selling)price of the boat and given you less for your trade. That would have lowered the amount of taxes you would be required to pay because the selling price was lower. The dealer can only lower the price of the boat to a certain point because after so much he would be selling the boat way to far under value and the state would then suspect that he was cheating them out of money.
Hello, I purchase my Skeeter in NC. You pay tax to Virginia Department of Game and Fisheries, 2% on The boat and motor before the trade in, less the add on's. Then you pay tax to DMV on the trailer. My trade in was not a deduction. Tax on my Trton was $520, one year later tax on the Skeeter was $937. Trailer tax $90. If you want to fish they got you.
Like I mentioned in the IM you sent me, I'm not 100% sure because I don't mess with that stuff. But in the past you would pay tax on the difference. Ohio has recently changed but I'm not sure about KY. If your dealer overtaxed you then it should be no big deal to refund the difference. What Skeeter did you end up getting?
I know we have made the sales tax mistake on other states before and it's no big deal to refund the difference. You should not have any issues. I'll check on Monday to see what ky does for sure. They don't let me mess with that stuff, I'd just mess it up.
Matt
In California you pay tax on the entire new purchase. The trade in is looked at just like a down payment. Doesn't matter whether it is a boat or cash. I can't believe that it would be different anywhere else. If that is the case I can't imagine why anyone would sell a boat outright.
Lets say you are you have a three year old boat that is worth $20,000 on trade but you think you can sell it out right for $22,000 it wouldn't even be worth the time you would almost save $2,000 on sales tax purchasing a $45,000 boat if you only have to pay tax on $25,000 instead of $45,000. I know California has more taxes and is more expensive that most states but I can't imagine that we are the only state this happens in.
$45,000 new boat
$3,487.50 7.75% Sales tax on $45,000
$20,000 Cash Down
$28,487.50 Financed
$45,000 new boat
$20,000 trade in
$1,937.50 7.75% Sales tax on $25,000
$26,937.50 Financed
Jason and Matt, this is really how you can structure your boat deals?
J.T. Garrison
Aim Marine
Yes, unless something's changed since I was writing deals. But, some of our Ohio and Indiana deals you can't do it on. I'm not sure the in's and out's because I've only wrote a few deals myself the past 2 years. But in KY, that's how it traditionally has been. WHY, because if you buy a $20000 boat and pay tax on it, then you turn around in 2 years and trade it in, you already paid tax on the trade-in, so it would be double taxation.
Matt
Here in Texas we only pay taxes on the amount after trade in. If you buy a $50,000 boat and they give you $20,000 on trade in for you old one you only pay taxes on $30,000. The way they look at it here is that you have already paid taxes once on the boat you are trading in. That property has been previously taxed. I just did it last week myself when I bought a boat. http://xs-s.com/zf/images/smile/emthup.gif
<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by fish4bass »</TD></TR><TR><TD CLASS="quote">In California you pay tax on the entire new purchase. The trade in is looked at just like a down payment. Doesn't matter whether it is a boat or cash. I can't believe that it would be different anywhere else. If that is the case I can't imagine why anyone would sell a boat outright.
J.T. Garrison
Aim Marine</TD></TR></TABLE>
I know for a fact that in Indiana (and I assumed most states would be the same way) you only have to pay sales tax on the DIFFERENCE between the trade-in and new purchase. Works exactly the same on automobiles.
That is amazing that California is that different. Alot of states you don't pay sales tax on used boat either....California you pay everytime the boat is sold. It could be a three year old boat and sold three times and everytime you pay sales tax on it.....
J.T. Garrison
Aim Marine
<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by fish4bass »</TD></TR><TR><TD CLASS="quote">That is amazing that California is that different. Alot of states you don't pay sales tax on used boat either....California you pay everytime the boat is sold. It could be a three year old boat and sold three times and everytime you pay sales tax on it.....
J.T. Garrison
Aim Marine</TD></TR></TABLE>
It's like that here on vehicles. If you lived in Louisiana and I sold you my truck, you would have to pay tax on it even though I already paid it when I bought it. Ridiculous. That's why ALOT of people put lesser amounts on the bill of sale to help with the taxes. That's what they go by, the amount on the bill of sale.
Yes, you only pay tax on the difference as I stated earlier.
New boat $45,000.00
Trade in $20,000.00
Difference $25,000.00
Tax on 25K $1,886.75
Total due $26,886.75
That is how we do it here, and the only way I have ever done it. It doesn't make sense to pay tax on the trade as well since you have already paid tax on it when it was originally purchased.
http://www.bassboatcentral.com/smileys/smile.gif
jason, thats how its done in texas http://www.bassboatcentral.com/boardstuff2/beers.gif
I'm with most everyone here. Here in MS you only pay the taxes on the difference because you already paid taxes on your boat you traded in. That's crazy to have to pay taxes twice.
Ok guys here it is. The Dealer made a mistake and is refunding the money. You only pay tax on the difference. Thanks for all the input
Buckrub http://www.bassboatcentral.com/smileys/smile.gif
Glad it all got worked out correctly for you.
http://xs-s.com/zf/images/smile/emthup.gif
Nice of the dealer to make good on it. Good deal.