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      02-16-2020, 05:16 PM   #1
Screwly
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Finance question in Texas

Hey guys! I had a question.... I am trying to buy a vehicle in Oklahoma and I live in Texas. I am trading my current vehicle in to the dealership In Oklahoma. I am trying to figure out how much I will owe in taxes since taxes weren't rolled into sales price. Am I taxed on full sales price or sales price minus trade allowance? Loan calculators I have used with numbers input show me owing 2218.00. Dealership tells me I am taxed selling price minus difference in trade and down payment. See my numbers below and see if you can help me. Thanks

Selling price 87500.00
Down payment 1000.00
Trade price 52000.00
Trade in owed 47500.00
Texas sales % 6.25
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      02-16-2020, 07:24 PM   #2
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Quote:
Originally Posted by Screwly View Post
Hey guys! I had a question.... I am trying to buy a vehicle in Oklahoma and I live in Texas. I am trading my current vehicle in to the dealership In Oklahoma. I am trying to figure out how much I will owe in taxes since taxes weren't rolled into sales price. Am I taxed on full sales price or sales price minus trade allowance? Loan calculators I have used with numbers input show me owing 2218.00. Dealership tells me I am taxed selling price minus difference in trade and down payment. See my numbers below and see if you can help me. Thanks

Selling price 87500.00
Down payment 1000.00
Trade price 52000.00
Trade in owed 47500.00
Texas sales % 6.25
According to the Texas Vehicle Sales Tax Guidebook:

"For retail sales of new and used motor vehicles
involving licensed motor vehicle dealers, the motor
vehicle sales tax is based on the sales price, less any amount given for trade-in vehicle(s) and/or dealer discount"

https://comptroller.texas.gov/taxes/...ons/96-254.pdf
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      02-16-2020, 07:50 PM   #3
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Originally Posted by WunderbarBimmer View Post
Quote:
Originally Posted by Screwly View Post
Hey guys! I had a question.... I am trying to buy a vehicle in Oklahoma and I live in Texas. I am trading my current vehicle in to the dealership In Oklahoma. I am trying to figure out how much I will owe in taxes since taxes weren't rolled into sales price. Am I taxed on full sales price or sales price minus trade allowance? Loan calculators I have used with numbers input show me owing 2218.00. Dealership tells me I am taxed selling price minus difference in trade and down payment. See my numbers below and see if you can help me. Thanks

Selling price 87500.00
Down payment 1000.00
Trade price 52000.00
Trade in owed 47500.00
Texas sales % 6.25
According to the Texas Vehicle Sales Tax Guidebook:

"For retail sales of new and used motor vehicles
involving licensed motor vehicle dealers, the motor
vehicle sales tax is based on the sales price, less any amount given for trade-in vehicle(s) and/or dealer discount"

https://comptroller.texas.gov/taxes/...ons/96-254.pdf
So would that tax be based off of 87500-52000 or 87500-5500(trade in minus owed+down payment)
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      02-16-2020, 10:11 PM   #4
WunderbarBimmer
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Quote:
Originally Posted by Screwly View Post
Quote:
Originally Posted by WunderbarBimmer View Post
Quote:
Originally Posted by Screwly View Post
Hey guys! I had a question.... I am trying to buy a vehicle in Oklahoma and I live in Texas. I am trading my current vehicle in to the dealership In Oklahoma. I am trying to figure out how much I will owe in taxes since taxes weren't rolled into sales price. Am I taxed on full sales price or sales price minus trade allowance? Loan calculators I have used with numbers input show me owing 2218.00. Dealership tells me I am taxed selling price minus difference in trade and down payment. See my numbers below and see if you can help me. Thanks

Selling price 87500.00
Down payment 1000.00
Trade price 52000.00
Trade in owed 47500.00
Texas sales % 6.25
According to the Texas Vehicle Sales Tax Guidebook:

"For retail sales of new and used motor vehicles
involving licensed motor vehicle dealers, the motor
vehicle sales tax is based on the sales price, less any amount given for trade-in vehicle(s) and/or dealer discount"

https://comptroller.texas.gov/taxes/...ons/96-254.pdf
So would that tax be based off of 87500-52000 or 87500-5500(trade in minus owed+down payment)
You are taxed on your negotiated sales price minus any rebates/incentives and the value of your trade-in. The down payment amount has no impact on the amount of tax you owe.
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      02-16-2020, 10:17 PM   #5
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Quote:
Originally Posted by WunderbarBimmer View Post
Quote:
Originally Posted by Screwly View Post
Quote:
Originally Posted by WunderbarBimmer View Post
Quote:
Originally Posted by Screwly View Post
Hey guys! I had a question.... I am trying to buy a vehicle in Oklahoma and I live in Texas. I am trading my current vehicle in to the dealership In Oklahoma. I am trying to figure out how much I will owe in taxes since taxes weren't rolled into sales price. Am I taxed on full sales price or sales price minus trade allowance? Loan calculators I have used with numbers input show me owing 2218.00. Dealership tells me I am taxed selling price minus difference in trade and down payment. See my numbers below and see if you can help me. Thanks

Selling price 87500.00
Down payment 1000.00
Trade price 52000.00
Trade in owed 47500.00
Texas sales % 6.25
According to the Texas Vehicle Sales Tax Guidebook:

"For retail sales of new and used motor vehicles
involving licensed motor vehicle dealers, the motor
vehicle sales tax is based on the sales price, less any amount given for trade-in vehicle(s) and/or dealer discount"

https://comptroller.texas.gov/taxes/...ons/96-254.pdf
So would that tax be based off of 87500-52000 or 87500-5500(trade in minus owed+down payment)
You are taxed on your negotiated sales price minus any rebates/incentives and the value of your trade-in. The down payment amount has no impact on the amount of tax you owe.
So this isn't right?
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      02-16-2020, 11:46 PM   #6
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Okay, I missed the fact that you owed money on your trade-in in your original post. This is a sticking point that, in my opinion, the guidelines aren't clear on because it says the tax is based on the sales price "less any amount given for the trade-in vehicle". In my case it was easy because my trade was paid off, so I just simply subtracted the amount they gave me for my trade from the price and calculated the tax. The question is, does the "amount given" equal the total amount they agree your car is worth, or the actual cash they provide you after paying off your trade-in? What is clear in the guidelines, and from my own personal experience, is that your down payment does not affect the taxable amount. Just to be sure on the trade-in value, I'd recommend giving the Texas Motor Vehicle Tax Policy line a call so that they can verify (1-800-252-1382), or maybe someone else on here has a better understanding of the guideline when you still owe money on your trade-in. Sorry I couldn't be more helpful.
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      02-17-2020, 09:31 AM   #7
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Thanks! I'm confused on that as well but I'll give them a call and see what's up. If any other finance guys can chime in I appreciate it.
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      02-17-2020, 06:52 PM   #8
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What you owe on your trade-in doesn't have any effect on the sales tax. All that matters is the sales price of the X7 minus the value they are giving you for your trade-in. So if $87,500 is the price and the dealership is giving you $20,000 for the value of your car you are trading in then you will be assessed tax on $67,500. It doesn't matter whether you owe $15,000 on that car or $25,000, the sales tax will be the same.
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      02-17-2020, 07:40 PM   #9
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Originally Posted by Nachos Libres View Post
What you owe on your trade-in doesn't have any effect on the sales tax. All that matters is the sales price of the X7 minus the value they are giving you for your trade-in. So if $87,500 is the price and the dealership is giving you $20,000 for the value of your car you are trading in then you will be assessed tax on $67,500. It doesn't matter whether you owe $15,000 on that car or $25,000, the sales tax will be the same.
Thanks for the clarification! I kinda thought that was the case but wasn't sure. Does it make a difference if I'm buying the car in Oklahoma?
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      02-17-2020, 09:15 PM   #10
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Quote:
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Quote:
Originally Posted by Nachos Libres View Post
What you owe on your trade-in doesn't have any effect on the sales tax. All that matters is the sales price of the X7 minus the value they are giving you for your trade-in. So if $87,500 is the price and the dealership is giving you $20,000 for the value of your car you are trading in then you will be assessed tax on $67,500. It doesn't matter whether you owe $15,000 on that car or $25,000, the sales tax will be the same.
Thanks for the clarification! I kinda thought that was the case but wasn't sure. Does it make a difference if I'm buying the car in Oklahoma?
I think nacho is correct, you pay tax on Sales - trade in, regardless of amount owed.

Also to answer your question, no for sure. I'm 100% positive you only pay tax in your home state when and where you register the vehicle where it's garages or kept overnight.

Thus, if you live in TX, you pay TX sales tax on all cars. That 110% positive about having bought multiple vehicles out of state.
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      02-17-2020, 09:50 PM   #11
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Thanks guys! I just want to know what to expect to pay when I head to dmv for tags. Double the price if I have to pay tax on all of the 87.5k!
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      02-18-2020, 08:35 PM   #12
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I live in Texas and have bought several cars from out of state. I've done it two ways. First way was I just paid the dealer for the price of the car with no tax and paid sales tax when I registered it at the DMV. Second was the dealership just collected TX sales tax for me and filed all the paperwork for me as well. It took a bit longer, but worked out in the end. Being in Oklahoma, they should have had this type of deal before. Last deal I had was from Nebraska and they even did an in/out for me where I already had a local buyer for the car I was getting rid of, but they did all the paperwork and essentially took my old car as a trade and sold it right to my buyer. So I got the benefit of saving tax as a trade in plus I got a higher price since I was determining the price. That dealership did all the TX paperwork for us even though they were from Nebraska. It was BMW of Lincoln.
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      02-18-2020, 08:43 PM   #13
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Quote:
Originally Posted by shellbmb View Post
I live in Texas and have bought several cars from out of state. I've done it two ways. First way was I just paid the dealer for the price of the car with no tax and paid sales tax when I registered it at the DMV. Second was the dealership just collected TX sales tax for me and filed all the paperwork for me as well. It took a bit longer, but worked out in the end. Being in Oklahoma, they should have had this type of deal before. Last deal I had was from Nebraska and they even did an in/out for me where I already had a local buyer for the car I was getting rid of, but they did all the paperwork and essentially took my old car as a trade and sold it right to my buyer. So I got the benefit of saving tax as a trade in plus I got a higher price since I was determining the price. That dealership did all the TX paperwork for us even though they were from Nebraska. It was BMW of Lincoln.
I am doing it the first way you described. So is the dealership sending me info to take to dmv to process or do I take my signed contract?? Salesman isn't very much help....
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      02-19-2020, 11:44 AM   #14
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I am doing it the first way you described. So is the dealership sending me info to take to dmv to process or do I take my signed contract?? Salesman isn't very much help....
Personally I would talk directly with the finance person (salesman are usually clueless) and see if they can take care of it all for you. Any chance I can avoid the DMV, I'll take it. If not, it might behoove you to call the DMV or stop by to see exactly what you need to make the process as smooth as possible. But from what I recall, I just took the contract/bill of sales showing the sales price and trade in value to the DMV and paid the tax along with registration, title, etc. fees.
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