I recently purchased a new vehicle from a dealer about 6 weeks ago. I intended to sell my old vehicle to the incorporated small business that my wife and I own, but that has proven to be unnecessary and I now intend to sell the old car. Is there any way that I can recoup some of the sales tax savings to which I would have been entitled if I had traded the old car in at the same time as I purchased the new car? What is my best course of action here?
Even if you traded in the old car and ended up with less out of pocket for the new car, sales tax is calculated on the price of the Item (car) you bought. The tax would be on the full price of the car.
Not universally true. In many states you only pay the sales tax on the difference between the price of the new car and the trade in.
Whiteknight I don’t know of a way, but I will point out that the difference in sales price that you get for a private sale versus trade-in will likely exceed the sales tax savings anyways.
Yes, Maryland is one such state. Good point on the difference in sales price.
Really! I did not know that. Thanks for the info.
In Missouri there’s a form the seller prepares and sends to the state. The state uses this to follow up in case the new owner “forgets” to apply for a title and pay sales tax on his purchase. The seller uses his copy of the form to document the sales price and this amount is used to reduce the tax to be collected on the new vehicle.