<VV> Sales Tax - California style
Sethracer at aol.com
Sethracer at aol.com
Wed Jun 7 22:11:46 EDT 2006
In a message dated 6/7/2006 6:44:08 PM Pacific Standard Time,
hyarnell1 at earthlink.net writes:
In Maryland, we don't have 'personal property tax' (thank God), but ANY time
a vehicle is re-titled, the state taxes it at it's current value, NOT
necessarily the selling price. If you tell them your '05 corvette cost you
$500, you better have a notorized bill of sale, otherwise it's book value
that they'll tax you on.
Now, if the car is over 10 years old, there's no book value, but a minimum
value is assigned (I think it's $600), so you pay $30 tax (5% sales tax).
California has an exemption for "garage" sales. It would generally apply to
an individual at the the outdoor flea market at a convention or Palm Springs
fan belt toss. It reads:
OCCASIONAL SALES — A sale by (and purchase from) a person who is not
engaged in a business
requiring a seller’s permit is exempt from sales and use taxes. These types
of sales are “occasional”
sales (some states have similar exemptions for “casual” sales). Generally,
a person who makes three
or more sales for substantial amounts in any period of 12 months is required
to hold a seller’s permit.
A person who makes a substantial number of sales for relatively small
amounts is also required to hold
a seller’s permit. (The 12 month test period can be the 12 months before the
sale in question, the 12
months after the sale in question, or any other 12 month period in which the
sale occurs.) A person
holding two garage sales with no other sales in any 12 month period in which
the garage sales are held
are regarded as making exempt occasional sales.
This is why I (as Silicone Wire Systems) do not sell Ignition wires at the
Fan Belt toss, just old Car parts, usually surplus Corvair stuff and race
stuff. If I sell Ignition wires, they are taxable. Since I do the "Flea Market"
bit less than 3 times a year, I and my customers, are exempt from sales tax on
those items. I do, indeed have a sales tax permit and collect California
sales tax on sales within California. Also, California does not have a sales tax
on used cars, except for those sold by dealers. BUT - they imposed a "use"
tax on private party used car sales - (I remember the many years ago when the
car dealers got that one through the legislature) For most cars, the DMV, as
in Harry's state, looks up the value on some chart or you have to prove what
you paid. For most older cars, they just accept the statement of the buyer
when they go into the office. Buyers are probably not always truthful when
stating their paid amount. It is likely the second negotiation that takes place
between private parties on any car sale in California. I compare it to the old
55 MPH speed limit, helping to make "criminals" of a lot of people. - Seth
Emerson
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