vehicle tax

[claymore504]

So, I had a vehicle given to me. I am filling out the form for Application for Texas Certificate of Title. There is a box that says $10.00 gift tax. Is that all I will pay in tax? Or will they still take 80% of the vehicles value and charge me tax on that?

 

[juwaba98]

If it was truly a gift, then yes the $10 gift tax should be all you owe. I could be wrong, but I think it has to do with the fact that it is a vehicle sales tax they charge and absent a sale there is nothing to tax. New cars through sweepstakes are different though. Again, just my understanding as I'm not a tax lawyer or anything resembling an expert on the subject.

 

[claymore504]

It truly was a gift. I just want to make sure I have all my paper work in line when I go to the Tax office. I do not want to stand in line to be told I am missing something. Is there some kind of "proof" they want to show it was a gift?

 

[tmd11111]

If it's a gift then the sales tax is $10, other wise it is .0625 %. You still have to pay title fees and registration fees as well.

 

[claymore504]

I bought a vehicle a while back and yes, the tax is 6.25%. But, here is where the state gets you. If the amount you paid for the vehicle is equal to or greater than 80% of the value you pay tax on that amount. If you paid less than 80% of the value of the vehiclethen you pay tax on 80% of the value. They get your money no matter what!

 

[40Arpent]

I bought a vehicle a while back and yes, the tax is 6.25%. But, here is where the state gets you. If the amount you paid for the vehicle is equal to or greater than 80% of the value you pay tax on that amount. If you paid less than 80% of the value of the vehiclethen you pay tax on 80% of the value. They get your money no matter what!

And the fact that they collect tax multiple times on the same vehicle, as it is sold from one person to another, ought to be illegal. It really is a racket.

 

[claymore504]

And the fact that they collect tax multiple times on the same vehicle, as it is sold from one person to another, ought to be illegal. It really is a racket.

Good grief! i did not even think of that. That is out of control.

 

[tmd11111]

80% tax

If you can prove that the vehicle is worth less then the 80% then you only have to pay tax on what you paid for it. Examples are vehicle is damaged or blown engine. As for taxing a vehicle multiple times this is only partically true. If you trade a vehicle in at a dealer then you only pay sales tax on the trade difference. Say you buy a $20,000 car and they give you $15,000 for your trade in then you only pay sales tax on the $5,000 traded difference.