Starfire61

Anybody ever had an experience like this?

Early in 2007 I bought a 1961 Olds Ninety Eight convertible project. The car is somewhat operable & looks halfway decent if you don't know what you're looking at. The reality of the car is that it needs a lot of work: mechanically it's quite tired, the color's wrong, the paint's bad, the interior's wrong, nothing works on the car... get the picture?

I think I paid a fair price for the car. It had been on Ebay with a Buy it Now of around $13K with no takers, so I got it for somewhat less. In IL, the sales tax on a car over 11 years old & costing under $15K is $25. This is what I paid in tax when I titled the car in my name.

Regardless of age, if the car sells for $15K or more, a tiered sales tax kicks in, going from $750 for a $15K car all the way up to $1500 for one costing $30K or more.

I recently received a certified letter from the Illinois Dept. of Revenue with a bill for in excess of $1600 in extra sales tax, interest, & penalties on this car. Apparently, regardless of what I paid for the car, some flunky in Springfield has decided that my 47 year-old restoration project is worth in excess of $30K & I need to fork over all that extra sales tax.

Bear in mind that nobody from the state ever laid eyes on this car. For all they know it's in boxes.

I had this happen once before, but it was with a much more expensive car that arguably was worth the value the state was assessing it at. At that time, they were only after a few hundred dollars. I was astounded when my attorney told me that what they were doing was perfectly legal. Furthermore, he said that by the time I paid the cost to fight the state I'd probably come out ahead just paying the tax bill.

This time, my attorney thinks I have a pretty good chance off getting out of it. I'm much more inclined to try to fight- it's a lot more money. Unfortunately, either way, it's probably going to cost me a bundle, but I'd rather give $1600 or more to my lawyer & an appraiser than to the damn corrupt State of IL.

Chuck

J-(Chicago)

They are definitely greedy and shady.
Let's say Bob X sells a car to William Y and signs Bob X on the title
William Y never titles it and sells it to John J
John J never titles it and sells it to me.

If I went to the DMV happy as a lark ready to register my sweet new car, they won't do it. Even if you have all bills of sale.
They will tell you that you must find William Y, make him title it in his name for $150 have him sign it over to John J. Then John J must pay $150 bucks to register it, and sign it over to me. I then have to pay the $150 to register it in my name.
First off, good luck tracking down even the first person, let alone 2 or 3 more.
AND of course if you do find any of them they will all tell you to **** off and won't sign anything about power of attorney, or $$$ etc.

You must then file an assload of paperwork and pay the ridiculous amount of money, maybe just to end up with a salvage title. Which will be murder upon resale.

This happened to a friend of mine and he was pissed for weeks. Then when I heard about it I took him to a local shady Currency exchange, slipped the teller a $50 and said: "Make it happen."
Out came his temporary plates 2 minutes later and we were on our way.

J-(Chicago)

Regardless of what you buy the car for, just have the sale for $100 on record.
Or if you ever get a second third or fourth hand title, It's easiest just to forge a cheap bill of sale from the original signature. I hate for it to be that way, but hey, it's their roadblocks, not mine. I'd fight fire with fire any day around here.
Chicago is shady, period.
And my buddy's situation was a prime example of an honest person getting raped by B.S.

rocketraider

Fight it, on principle. They're not playing by their own rules. If you have a bill of sale, that should be all the proof they require of what you paid for the car and what you should have had to pay tax on. It is ludicrous to assess tax on an intangible value that some government wonk thinks is more reflective of a car's sales price than what was actually paid. I forget, guv'mint is in its own little world, far removed from reality...

This is why I keep saying these damn high-profile auctions have ruined the car hobby. Cash-strapped (or in some cases just plain greedy) government agencies are aware of these auction results and have used them in the past to assess outrageous property taxes on old cars (those of you in Virginia will know what I'm talking about).

We had to beat back an attempt to screw with the antique licensing statutes this year. Since the moronic legislator (who represents my House District ) who introduced that bill sits on the Virginia Legislature's Counties Cities and Towns subcommittee, I'm pretty sure he's gonna try to screw with them again until he gets antique plate cars back in the personal property tax system. If that happens, it will be prohibitively expensive to own an old car in the Commonwealth because I can almost guarantee the local tax boards will try to use auction results when assessing tax value.

I have the satisfaction of knowing that my time, money and support for his opponent, helped come within 600 votes of unseating him this year. What's bad is he tries to pass himself off as a car guy- if you can call racing Porsches while paying someone else to do the setup on them being a true car guy.

Modern Motoring

what's the difference between a Porsche and a porcupine ? A porcupine has the ****** on the outside.

Bosco1956

bjtstarfire

My experience at least here in the state of PA is that you only pay tax on where the purchased car gets registered. Here in PA that is 6% of the purchase price. You have to declare the value of the car on a legal form so the days of saying it was 100 bucks vs. the real price you paid to save tax is and has been over in PA for quite some time.

This way your not taxed twice and at the least your state gets the revenue.

Olds64

Definitely fight it. Hopefully your lawyer can help you out. I would rather pay lawyer's fees than give ONE RED CENT to the state.

Fred H

If this was an arms length sale, between unrelated buyer and seller, this is the textbook definition of defining market value. If you have a cancelled check or bill of sale that shows the consideration paid, you should give copies of those to the state and argue your case. The tax should be charged on the actual consideration paid, not what some beaurocrat thinks its worth.

Fred H

bgarrett

Go to a different motor vehicle office. Say you bought the car from the guy who's name is on the title.
Keep it simple
Forge documents as needed
Good luck

Once I bought a wrecked car and the owner promised me the title
I repaired the car and he never gave me the title.
I COULD have driven the car, gotten into a wreck and the previous owner would be legally responsible! but I fraudulently requested a duplicate title and forged his name, allowing me to sell the car.
So I broke the law but actually did the morally correct thing

Nailhead 88

In Minnesota we have two ways of doing it up here. Regular plates and they sock it to you with the old price guide for the highest taxes. The other way is collector plates, street rod, antique plates a fixed fee $125 the last time i did it, now it's a little higher.

The plates are good for life and thats the price no matter what you paid for the car, a Million bucks same low price.

After a year you can buy regular plates with out the paying the large fees you would of had a year earlier. There are some driving restrictions, you can't use it to drive to work everyday etc.

Olds64

Uncle hands in my pockets!

desert442

I had the simular situation after buying my 67 4-4-2. The owner I bought the car from had the title alright, but the guy he bought it from signed the wrong section of the title. So, some detective work was done, in addition to extra paperwork as required by the AZ state DMV. It took me a month to track the original owner down, and another 3 months after that to get him to sign the forms that the AZ DMV required for a title transfer. Luckily, I wasn't hit with any extra fees, taxes or anthing else other than a mere $12 title transfer fee.

I guess it was the time involved that got frustrating. I wanted to get it titled, registered and insured to make the HOA I live in happy, and to keep the HOA's goons from towing it from my property.

I'd fight it, as a matter of principle. What message does it send if you don't? I wish you luck on this one.

occupant

I purchased a 1997 Dodge Intrepid last year for $800. Had two blown head gaskets and serious electrical issues. I spent 3 weeks and $300 in parts/machining getting it roadworthy. Spent an additional $400 getting it to pass emissions testing. And upon entering our county tax assessor's office, I was told I had to pay sales tax based on a market value of $2400. So paid $150 instead of $50 in sales tax. An extra $100 I didn't really have. I sold the car and broke even less tax, title, and tags because I had to sell it quickly since I went broke fixing it up. Took the $1500 I had in it although I could have held out to $2000 had we not needed a week's worth of groceries and diapers and formula and gas money for my wife's car. Was tax time, people had refunds left and right but I had to take what I could get that day I got the title in the mail. That $100 cost me $600!!!

Now I know the two keys to this. 1) Buy a car older than 25 years because they go by selling price, not market value. 2) If you buy a late model car for more than $1600 below market value, spend the $100 to get it appraised by an insurance adjuster and pocket the small change difference *groan*

98sforever

Fight it. The State gives tests to people who want to work for it. The results and clout will get you the job. Strike that, clout will get you the job, the test results don't matter. I just paid a late fee to the State of Illinois because they claimed I filed a quarterly report late (it was only $12.00). Next day I get a letter saying disregard the late notice, they made a mistake. Bet I never see my $12.00.

59-59-59

I dont know if many people will agree with me, but, THE SALES TAX WAS ALREADY PAID IN '61 when the car was new!! How this country is broke is beyond me!

malatu

In Delaware, you pay a transfer tax on whatever is greater, the sales price or the lowest price listed in the NADA Book. Now there is an exception. If you get the vehicle professionally appraised, and present the appraisal to DMV, they will use that amount for calculating the sales tax on the vehicle. Although getting an appraisal is a bit of a pain in the ***, it's a fair way of assessing a tax on vehicles such as yours or ones that "are in pieces and in a box".

KQQLCAT

I had this problem in Minnesota also because they have a list of old car values they go off of. I wrote a letter to the attorny generals office telling them that it's illegal to tax for money not received he aggreed and had no knolwege of the DOT's practice and changed it. I have since moved from the Land Of 10,000 Taxes.
Good Luck
Pat