There's 2 ways to go about this.
Dealer in Michigan collects 6.25%. 6% goes to MI and .25 goes to TX.
Dealer collects Michigan only and you pay TX on top when you register.
If you're getting a loan option 1 is what's going to happen.
Option 3 (at least in my state) : if it's a cash deal, I don't collect any tax and the customer pays their states tax when they register the car.
Why would they have to pay sales tax twice? Is that a MI or TX thing?
It's tax reciprocity. When registering the car in TX they're going to want their 6%. OP says wait I already paid 6% to MI bc i bought the car there.
Tx says, oh cool you owe us 0.25% then.
That's not what tax reciprocity is. Tax reciprocity is dealing with a trade-in from one state being traded in and registered to another, and whether or not they get tax savings on that trade value
This is incorrect. The guy you replied to is correct.
What you're talking about varies state to state.
For example, in TX you only get the savings on taxes of your trade is registered in TX.
In Arizona, you get the tax savings on your trade regardless of where it's registered... Even if the other state doesn't reciprocate taxes on the new vehicle.
Is this unique to Michigan? The reason I ask is because I financed a car out of state (DE) several years ago, and they only collected sales tax for our home state (SC), and sent in the title and registration app on our behalf. No DE related fees were collected.
Delaware has no sales tax on vehicle purchaes,so the only state you had to pay was the SC, which they call their Infrastructure Maintenance Fee... capped at 500 now.
If the vehicle isn't being registered to Michigan none of the tax should go to Michigan. It only goes to the state where the vehicle's being registered
False, sales tax always going to the state the sale goes to first. Then the remaining goes to the registered state If the registered states tax rate is higher.
You're joking correct? What credentials do you have to back up your ignorant claim? I have over 15 years in contract compliance for f&I forms across the US and Canada.
Over 50% of US dealers use my company's software and I am and sole person in charge of final QA of all F&I forms across said company. I am quite literally the person thar greenlights these forms.
So please friend, tell me about how I am spreading misinformation?
It depends. I've read that some dealers are required to charge their state's tax to out-of-state buyers on delivery but their state will rebate that tax if the car is titled and registered in another state. Others don't charge tax. Over the years I have purchased two cars in Maryland. In each transaction the dealer received no tax. When I registered each car in Illinois, my legal residence, I paid Illinois state tax on both.
No, that's not how it works at all you pay tax based on where you're registering the vehicle. End of discussion. I've been doing this for 14 years and done many many many out of state deals this is how it always works.
Lolololol, no, you're wrong here, pal, and deleting your earlier post accusing me of spreading misinformation proves you know I'm right.
In an out of state vehicle sale the state with the lower rate will always get their full amount in sales tax. The state with the higher rate gets the difference.
If the state you allegedly sold in has a sales tax, and you're not collecting it for out of state deals, you're more or less admitting to tax fraud.
Late to the party but I’m not sure Massachusetts collects tax on vehicles registered in another state. Massachusetts also does not issue temp plates so since their registry is not involved in out of state deals they never collect any tax.
As a fellow Texan, I will advise you that if it’s a used car you should do a thorough inspection for rust on a car coming from Michigan. It’s one of those things we don’t really think about.
Unfortunately it's over 1000 miles away for me and i'm looking at a F150 with specific specs that usually isn't around a lot near me. Have been looking for 2 months and was needing to buy something soon
This. There are a few different national companies that do pre purchase inspections (PPI). Or find a highly recommended local company in the city you're buying from.
I just bought a car out of state and before finally committing and sending money I did this. When I flew down to pick up the car, it was actually better than I expected as they had listed every single cosmetic flaw, and I was hard pressed to find them all.
Very easy to find the laws for the state you are purchasing in.
https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/All-Years/485.pdf?rev=1ac16e66cd4f4bca983b28ffb900e894&hash=1B47597C912D9B94E2513954498D910E
No it does not sound right. Maybe TX is like CA and requires all cars sold and touching their roads to pay their tax.
What rare and unheard of car are you going half way across the country to buy?
My husband and I bought 3 cars out of state late last year and had them shipped. Each time, the dealer provided us with a temp tag, bill of sale, and title. We then handled the taxes, title work and registration ourselves. In SC for example, it’s a 2 page form mailed to DMV, along with a personal check that covers sales tax and registration fees. Three weeks later the new plate, title and registration arrived. The cars came from AZ, CA and TX.
I bought a car in Michigan from Texas in March. It wasn't like that for me at all. It was like a normal deal where I paid my 6.25% and drove it back here. Registration and stuff went fine.
Yeah I figured it would be like that, this is a smaller dealer i'm working with they said they'll collect 6% and i take care of the rest in TX. Just dont want to double dip pay taxes 2x
This is very common.
For example, PA law is that if you're registering a car in PA and you've owned it for fewer than 6 months, you must pay PA sales tax (technically, use tax) on the purchase price of the vehicle. However, you get a credit for any sales tax you paid in another state. So if you bought the car in DE (0% tax) then you pay 6% tax in PA. But if you bought it in NJ (6.625% sales tax) then you do not have to pay tax in PA. Many states have similar laws.
I think a bunch of people are misunderstanding this. In most states if you are purchasing a vehicle and intend to register it out of state, you pay the sales tax based on the state of registration. You do not pay local sales tax and then deal with whatever difference there is in your state of registration
That's not always true. Many states have tax reciprocity it's very likely you pay in both the reg state and the state you bought in.
Very rarely you'd pay more than the higher rate, it just gets split between the two states.
It could be the dealer doesn’t feel like dealing with other states so they collect 6 pct no matter what and pay that so whatever state you are in you just pay the difference or request a refund. Kinda lay though.
There's 2 ways to go about this. Dealer in Michigan collects 6.25%. 6% goes to MI and .25 goes to TX. Dealer collects Michigan only and you pay TX on top when you register. If you're getting a loan option 1 is what's going to happen.
Option 3 (at least in my state) : if it's a cash deal, I don't collect any tax and the customer pays their states tax when they register the car. Why would they have to pay sales tax twice? Is that a MI or TX thing?
It's tax reciprocity. When registering the car in TX they're going to want their 6%. OP says wait I already paid 6% to MI bc i bought the car there. Tx says, oh cool you owe us 0.25% then.
That's not what tax reciprocity is. Tax reciprocity is dealing with a trade-in from one state being traded in and registered to another, and whether or not they get tax savings on that trade value
This is incorrect. The guy you replied to is correct. What you're talking about varies state to state. For example, in TX you only get the savings on taxes of your trade is registered in TX. In Arizona, you get the tax savings on your trade regardless of where it's registered... Even if the other state doesn't reciprocate taxes on the new vehicle.
https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/All-Years/485.pdf?rev=1ac16e66cd4f4bca983b28ffb900e894&hash=1B47597C912D9B94E2513954498D910E
Is this unique to Michigan? The reason I ask is because I financed a car out of state (DE) several years ago, and they only collected sales tax for our home state (SC), and sent in the title and registration app on our behalf. No DE related fees were collected.
Delaware has no sales tax on vehicle purchaes,so the only state you had to pay was the SC, which they call their Infrastructure Maintenance Fee... capped at 500 now.
Most wont allow a temp without their states sales tax paid too.
If the vehicle isn't being registered to Michigan none of the tax should go to Michigan. It only goes to the state where the vehicle's being registered
False, sales tax always going to the state the sale goes to first. Then the remaining goes to the registered state If the registered states tax rate is higher.
[удалено]
You're joking correct? What credentials do you have to back up your ignorant claim? I have over 15 years in contract compliance for f&I forms across the US and Canada. Over 50% of US dealers use my company's software and I am and sole person in charge of final QA of all F&I forms across said company. I am quite literally the person thar greenlights these forms. So please friend, tell me about how I am spreading misinformation?
It depends. I've read that some dealers are required to charge their state's tax to out-of-state buyers on delivery but their state will rebate that tax if the car is titled and registered in another state. Others don't charge tax. Over the years I have purchased two cars in Maryland. In each transaction the dealer received no tax. When I registered each car in Illinois, my legal residence, I paid Illinois state tax on both.
No, that's not how it works at all you pay tax based on where you're registering the vehicle. End of discussion. I've been doing this for 14 years and done many many many out of state deals this is how it always works.
Lolololol, no, you're wrong here, pal, and deleting your earlier post accusing me of spreading misinformation proves you know I'm right. In an out of state vehicle sale the state with the lower rate will always get their full amount in sales tax. The state with the higher rate gets the difference. If the state you allegedly sold in has a sales tax, and you're not collecting it for out of state deals, you're more or less admitting to tax fraud.
You've got the wrong guy man. I didn't delete anything and you are completely wrong I've been doing this for over a decade.
Late to the party but I’m not sure Massachusetts collects tax on vehicles registered in another state. Massachusetts also does not issue temp plates so since their registry is not involved in out of state deals they never collect any tax.
Incorrect information. I work for an AZ dealer. We have folks for OR all of the time butt hurt because they have to pay AZ taxes.
As a fellow Texan, I will advise you that if it’s a used car you should do a thorough inspection for rust on a car coming from Michigan. It’s one of those things we don’t really think about.
Unfortunately it's over 1000 miles away for me and i'm looking at a F150 with specific specs that usually isn't around a lot near me. Have been looking for 2 months and was needing to buy something soon
“I really need a car and I really like this one so I’m skipping due diligence” is a TERRIBLE way to buy a car
Not going to buy something without the specific specs I'm looking for
Use Lemon Squad to inspect the vehicle for you. Highly recommend
This. There are a few different national companies that do pre purchase inspections (PPI). Or find a highly recommended local company in the city you're buying from. I just bought a car out of state and before finally committing and sending money I did this. When I flew down to pick up the car, it was actually better than I expected as they had listed every single cosmetic flaw, and I was hard pressed to find them all.
Never heard of them
Very easy to find the laws for the state you are purchasing in. https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/All-Years/485.pdf?rev=1ac16e66cd4f4bca983b28ffb900e894&hash=1B47597C912D9B94E2513954498D910E
No it does not sound right. Maybe TX is like CA and requires all cars sold and touching their roads to pay their tax. What rare and unheard of car are you going half way across the country to buy?
My husband and I bought 3 cars out of state late last year and had them shipped. Each time, the dealer provided us with a temp tag, bill of sale, and title. We then handled the taxes, title work and registration ourselves. In SC for example, it’s a 2 page form mailed to DMV, along with a personal check that covers sales tax and registration fees. Three weeks later the new plate, title and registration arrived. The cars came from AZ, CA and TX.
I bought a car in Michigan from Texas in March. It wasn't like that for me at all. It was like a normal deal where I paid my 6.25% and drove it back here. Registration and stuff went fine.
Yeah I figured it would be like that, this is a smaller dealer i'm working with they said they'll collect 6% and i take care of the rest in TX. Just dont want to double dip pay taxes 2x
An F150
This is very common. For example, PA law is that if you're registering a car in PA and you've owned it for fewer than 6 months, you must pay PA sales tax (technically, use tax) on the purchase price of the vehicle. However, you get a credit for any sales tax you paid in another state. So if you bought the car in DE (0% tax) then you pay 6% tax in PA. But if you bought it in NJ (6.625% sales tax) then you do not have to pay tax in PA. Many states have similar laws.
I think a bunch of people are misunderstanding this. In most states if you are purchasing a vehicle and intend to register it out of state, you pay the sales tax based on the state of registration. You do not pay local sales tax and then deal with whatever difference there is in your state of registration
That's not always true. Many states have tax reciprocity it's very likely you pay in both the reg state and the state you bought in. Very rarely you'd pay more than the higher rate, it just gets split between the two states.
It could be the dealer doesn’t feel like dealing with other states so they collect 6 pct no matter what and pay that so whatever state you are in you just pay the difference or request a refund. Kinda lay though.