Repaying sales tax when refinancing a vehicle?

37,251 Views | 36 Replies | Last: 13 yr ago by 62strat
Teslag
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12:22p, 7/30/12
I recently purchased a new vehicle and fincanced with ford motor credit to get a $1,000 rebate. The rate was higher than my credit union but my intent was to immediately refinance with them as soon as I got my first statement from fmc. Credit union had no problem with this but said that I would need to pay the taxes again when refinancing. Does that make any sense?

And yes I know that sense I didn't pay cash I'm an lol poor.
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GBRAggie
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12:24p, 7/30/12
quote:
I'm an lol poor.


EOT
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Teslag
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12:26p, 7/30/12
Fine I'm poor. Now answer the question.
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CDUB98
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12:27p, 7/30/12
Does not make sense.

You pay the taxes to the state once.
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Wildcat
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12:36p, 7/30/12
Not an expert, but the transaction is not you refinancing. You don't own the car. The credit union is purchasing a used car from Ford Motor Finance. The sale means sales tax. And the rebate was just bait for a loan with bad terms.

Sorry. Ford 1, you 0
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Quartz
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12:39p, 7/30/12
She does own the car Ford Motor Credit has a lien. I have not heard of this, you may want to clarify this is a refi. They may be thinking you are buying new.

[This message has been edited by Quartz (edited 7/30/2012 11:40a).]
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jh0400
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12:42p, 7/30/12
Did you lease it, or did you buy it? If it's a lease you'll owe sales tax, but you shouldn't if the original transaction was simply a purchase financed by FMCC.
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jh0400
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12:42p, 7/30/12
quote:
Not an expert,


No ****?
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Teslag
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12:43p, 7/30/12
The terms of the loan aren't bad. It's just that the credit union was better. Still not seeing how it's a purchase. On a secured title theres a line for owner and one for a lienholder. I'd still the owner on both.

No, wasnt a lease.

[This message has been edited by Lacy05ag (edited 7/30/2012 11:44a).]
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Jett01
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12:46p, 7/30/12
No, you don't have to pay more sales tax. If it's in your name already, you'll just pay $33 to have the lienholder changed.
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combat wombat™
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1:02p, 7/30/12
Should not have to pay sales tax. You already own the car.
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Wildcat
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1:07p, 7/30/12
I was wrong
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combat wombat™
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1:12p, 7/30/12
Lacy, someone at the CU has head up their arse.
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Jett01
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1:23p, 7/30/12
What CW said. This is a simple refi. If they don't know the specifics of this, I'd be wary of having my loan there.
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Teslag
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1:24p, 7/30/12
Cu is saying the tax assessor said this. I'm thinking there's a miscommunication somewhere
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The Collective
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1:24p, 7/30/12
Shocking that a credit union would employ such a dumbass...

[This message has been edited by Cjs4715 (edited 7/30/2012 12:25p).]
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combat wombat™
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1:27p, 7/30/12
You paid the tax when you originally purchased your vehicle. Title/ownership is not transferring and, therefore, you do not owe additional SALES TAX. Have the idiot at the bank call a different idiot at the Tax assesor's office.
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rangersncowboys
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1:29p, 7/30/12
Sounds like the CU thinks you're refinancing a house.
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Jett01
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1:44p, 7/30/12
The CU doesn't even have to know what kind of rebates you got. All they need to know is the payoff at the current finance company and that their lien is currently on the vehicle.

If they argue with you, then you don't need to do business there. (email me instead, and I'll hook you up with one of our lenders who know the CORRECT procedures and fees for this! )
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62strat
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3:21p, 7/30/12
you do pay sales tax twice if you lease the vehicle, then purchase it at the end of the lease.
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Husky Boy Jr.
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3:49p, 7/30/12
ANOTHER TAX FROM OBAMA THE SOCIALIST
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jamotoe1
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3:53p, 7/30/12
quote:
you do pay sales tax twice if you lease the vehicle, then purchase it at the end of the lease.


Not exactly. During the lease you pay tax on the depreciation from the negotiated cap cost to the residual. If you then purchase for the residual price you're just paying tax in the residual. The total sales tax end up being pretty close
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TASCer
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5:49p, 7/30/12
When you refi an auto with another financial institution, you will need to pay for a change in the title because of a new lien holder. No charge for sales taxes. Someone was misinformed.
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62strat
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6:51p, 7/30/12
quote:
Not exactly. During the lease you pay tax on the depreciation from the negotiated cap cost to the residual. If you then purchase for the residual price you're just paying tax in the residual. The total sales tax end up being pretty close


you would think so, however, you are wrong; speaking from personal experience here, and looked it up after I raised hell.

http://www.leaseguide.com/Articles/texas-auto-lease.htm
http://www.carbuyingtips.com/lease.htm

Once the vehicle was purchased after lease end, dealer said they had to charge tax on sold amount, essentially meaning we paid tax twice on the residual value.


[This message has been edited by 62strat (edited 7/30/2012 6:02p).]
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jamotoe1
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7:07p, 7/30/12
quote:

Once the vehicle was purchased after lease end, dealer said they had to charge tax on sold amount, essentially meaning we paid tax twice on the residual value.


[This message has been edited by 62strat (edited 7/30/2012 6:02p).]


What are you defining as the 'sold'? Do you live in Arkansas or new York and getting super confused about a balloon contract?

[This message has been edited by Jamotoe1 (edited 7/30/2012 6:17p).]
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Jett01
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7:53p, 7/30/12
When you buy out your lease, you have to pay taxes on the purchase, because you are buying it from the lease company.

However, the bill of sale may show taxes already paid, so they you would just pay taxes on that sales price.
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Bleeding Heart
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8:11p, 7/30/12
Hi Lacy05Ag, I do not have a solution to your problem but I would be a willing and able lover to you. We could spend each evening cuddling under a blanket after which I would mount you like a lion.
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Teslag
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8:29p, 7/30/12
No thanks
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aggolfer
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9:51p, 7/30/12
Just did this about 6 months ago from Ford. Didn't pay sales tax the second time.
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jamotoe1
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9:52p, 7/30/12
Then you must have has a balloon contract
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Teslag
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10:02p, 7/30/12
Contacted the tax assessor and she said it was a misunderstanding, they thought the car was originally leased. Thanks a lot credit union for the headache today. Glad I came here first for lolpoor talk and infinite wisdom of the GB.
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62strat
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12:00a, 7/31/12
Jamatoe, in a nutshell, approx amounts:
Leased a $30k car. Residual value at $17k. Taxes equaled the tax rate multiplied by $30k. (not on $13k, like you would think it should be.)
Payments resembled that of a $13k note over 3 years.

Lease ended in 3 years, decided to purchase the car for the predetermined $17k and paid taxes on that $17k as well.
So, paid taxes twice on the residual value of $17k, about $1k X 2.
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bmc13
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12:15a, 7/31/12
from your link above:


quote:
Texas state laws consider the sale of a vehicle by a lease company at lease-end to be a separate sale, although a special one, and the lessee is not charged sales tax again if the correct amount of tax was paid originally at the beginning of the lease.
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62strat
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9:58a, 7/31/12
exactly.. that's why I raised hell. Since tax was paid on full vehicle, I told them I shouldn't have to pay it again, but they said it's their policy to charge sales tax when buying a used vehicle.

This was Fred Haas Toyota.
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aggieforester05
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11:47a, 7/31/12
In my opinion, there should only be sales tax on new car sales. I think the government taxing used car sales is double taxation and complete horse****.
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