Specific problem
by Has this ever happened to anyone:
You buy a car and the loan, title, registration and insurance is in your parent's name.
You move to another state.
You insure the car in your name at your address.
You attempt to register the car in your name and new state, but cannot because of specific tax issues. If you did, you'd have to pay sales tax on the balance of the loan to your new state.
I have no idea how to save paying this sales tax. It comes out to about $500. It's money that I've already paid, though, because sales tax was included in my original loan amount. I'm really, really frustrated and upset and any advice or ideas would really help.
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16 Comments
ohhh i've been through all 4 of those... except for the last one. so really.. just 3. and that... is no help to you at all
I'm not exactly sure why this would be happenning. Has the title been transferred to your name already? (You really shouldn't have been able to get insurance in your name if not, but insurance companies are stupid sometimes.) If so, then AFAIK you should only have to pay sales tax if the state you're living in has a higher rate than the previous state you lived in, and even then you should only have to pay the difference.
The title is not in my name. I convinced my insurance company that I was going to change it to my name, and they took my word for it. The problem is, that since my name has been nowhere on the car, as far as the state of Pennsylvania is concerned, I, as a single entity, never paid sales tax, my father did.
What you'd probably have to do is have the New Jersey title transferred to your name. Then transfer that to Pennsylvania. In order to do that tax-free you would probably have to call it a gift. Unless your parents have given you too much this year in which case you'd have to pay capital gains tax on it.
They told me that since they're a balance left on the loan that doesn't belong to my dad, but the loan company, he can't give it as a gift.
Wow. That's a pain. Can you leave it in your father's name until the loan is paid off?
No, because then it'd have to be insured in his name in my state, and I think that's insurance fraud. The loan still has 4 years to go.
Well, I'm out of ideas. I hope you manage to figure out some way to avoid it, though. I know I'd be really pissed off if that happened to me.
can you give your dad a dollar and say on the registration that that that was the cost of the vehicle to you? it's not a gift then.
Unfortunately, no, because the loan company holds the title and therefore owns the car. They might ask for more than $1. I'm going to go to a branch of the bank tomorrow and ask their advice. The whole experience has really gotten me stressed, though.
tell the loan company you are giving them $1 period-take it or leave it. be tough
and if they say no, tell them this is a hostile takeover, and you're buying out the company, you saw this happen with AT&T Wireless and now you want your own company.
can't the lawyers you work for help you? lawyers are shady-they know all the ways to cheat the law.
They don't know anything about tax law. My aunt's an accountant, I'm going to call her. I don't think she's very shady either, though. :)
If you kept your original bill of sale, all you have to do is show it to DMV and they shouldn't make you pay the sales tax. I bought my car when I was living in NJ; now I live in NY and DMV in NY told me that when I finish paying the car off and the title comes to me, I bring the title and the original bill of sale, and they will exempt me from the tax.
But the car's not paid off yet.