Do I have to pay state sales tax on the ATV I bought from someone else?

Yep.

<you will need to go to your county tax assesor and pay sales tax when you transfer the title over to your name....i think that is how it works.

DVM

There is no title on an ATV, just a bill of sale. There is no registration or license for an ATV. However, sales tax was probably paid on the original purchase unless it was for "agricultural" or other tax-exempt use. My guess is that no sales tax is due on a person-to-person sales.

DP

[This message has been edited by Aggie65 (edited 7/28/2007 9:49p).]

State allows for up to 2 "occassional sales" on items subject to sales tax in a 12 month period. So there's no tax provided the seller is not in the regular business of selling ATVs.

Motor Vehicle Tax is different than Sales Tax. Since this vehicle is not licensed for traveling on a public road, that doesn't apply.

Check out paragraph (1) in section (b):
http://info.sos.state.tx.us/pls/pub/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=34&pt=1&ch=3&rl=316

well, there is a title for it, I have it and the seller signed it over to me. It is also registered through April...I have that too.

I went to transfer the title and registration the other day and they were gonna charge me $350 tax on the purchase price of it. One lady that worked there said I did not have to pay tax but the hag that was helping me called someone else and they said I had to pay tax. Anyways, I left and figured I would try to find out before I paid it.

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There is no title on an ATV,

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Wrongo.

Are they trying to charge you Motor Vehicle Tax or Sales Tax? Don't confuse the issue as they are two separate taxes and not interchangeable. Most people don't realize this and confuse the two.

If it's motor vehicle tax they're tying to charge, tell them that doesn't apply since it's unlicensed. If it's sales tax they're trying to charge, tell them about the occassional use allowance provided the person you're buying from qualifies.

Here's a letter ruling that should shed some light on how the item should be taxed:

http://aixtcp.cpa.state.tx.us/opendocs/open30/200610773l.html

I have a title for my Polaris Ranger! And yes, you do have to pay SALES tax, not motor or road tax, just sales tax...$350 sounds steep? What was the sale price?

DVM

just claim the sales price was $100 and pay the tax on that...

They wanted to charge me 6.25% of $5500 (the sale price).

So I can just say I bought it for $100??

DVM97, so your saying this occasional use thing does not apply here?

[This message has been edited by aggzwin (edited 7/29/2007 2:52p).]

I´m not sure what occasional use thing you are referring to, but from what i do know about buying a used ATV, you only need to pay sales tax for the sale of the vehicle. The 6.25% sounds about right, now if you paid $5500, then $300ish sounds about right, but didn´t you tell me earlier that you only paid $2500 for the ride? Wow that sure would make the sales tax amount due more in line with the price you actually paid, not the asking price of $5500, you got a great deal athe that price. Now let the hag at the tax assesors office know you only paid $2500, not $5500!

DVM

I paid the guy $5500 for the ATV and $500 for the trailer.

So I can just make up an amount I paid for it? Surely they need some sort of verification, i.e. copy of check or something to verify the amount I bought it for.

The old "I paid $100 for it" ploy doesn't work anymore on over the road vehicles-they use the Thomas Blue Book to determine fair market price and tax accordingly, regardless of what you claim you paid. (Might not go into effect until 9/1/07-not sure effective date as it passed this session.)

I would bet there is a similar publication for boats and ATVs. So if they decide you do have to pay sales tax, there's probably no easy way around it.

[This message has been edited by Aggiefan54 (edited 7/30/2007 10:13p).]

What is the risk in getting the title signed over by the seller, but never actually getting the title legally transferred at the county office?

My dad is a sole proprietor in the oilfield industry and tries to keep assets out of his name. So when we finished restoring an old Chevelle he bought for us when I was in high school, he "gave" it to me and I think we only had to pay a small fee to transfer the title.

This was ten years ago though.

Plano, not sure....

I also have a letter signed by both of us stating the vin #, date, sale price, etc.....

Sounds like I am just gonna have to pay the $350.

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The old "I paid $100 for it" ploy doesn't work anymore on over the road vehicles-they use the Thomas Blue Book to determine fair market price and tax accordingly, regardless of what you claim you paid.

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I hadn't read that. Are you sure? Even when you buy a car or truck, you're only taxed on the amount you paid AFTER TRADE-IN. Maybe they've changed those rules too, but if so, there goes a huge argument the car dealers make in favor of trading in your old ride versus selling it yourself.

I'm surprised that got thru the legislature - you know the car dealers lobbied against it.

What you're saying is that if you buy a junker with a bent frame and bad engine that you have to pay tax on the full "value"? If not, just claim it's a basket case REALLY WORTH only $100 and you bought it as a project. If they call your bluff and want pictures, use photoshop. If they REALLY call your bluff and want to see it in person, go back another day and pay the "real" amount to a different clerk.

I was gifted a car about 4 years ago (out of state car no less). Didn't pay anything other than the tranfer costs at the tax assessors office. I just explained the circumstances around why I was given the car and that was it.

Draft a bs bill of sale and take it to them with a lower price on it. No one pays full tax on stuff like that. It's ridiculous that you have to pay a cent because it has already been taxed once.

just say it was damaged and you only paid a couple hudred bucks for it.

Every motorized vehicle that has 2 or more wheels, carries at least one passenger and/or cargo must be titled in the state of Texas. ATV's are titled as off-road vehicles, therefore are not subject to motor vehicle tax. They are however subject to sales tax, but if the vehicle is used for farm/ranch use you can be ag tax exempt (not sure of the actual qualifications for ag exempt) Your title office should have the form for you to fill out to be tax exempt.

How about you just pay the tax if you're supposed to?

I agree that you shouldn't pay it if you're not required, but lying to reduce the bill is pretty darn crappy.