Ask TaxMama.Com Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 6, Issue 256        April 23, 2004

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Car Tax » From: The Internet Dear TaxMama: I bought a used car from a friend, so we did not make a contract. It was a spoken deal. However I included it in my tax report this year and the IRS is asking me to pay 8% of the total amount of the car that was $7.000 Why do they ask for a percentage if I did not buy the car in a dealership or in any other place? Thank you for taking the time to read this email Sincerely, Berenice Dear Berenice, IRS is asking for this? No, it must be your state. Sales taxes are due on all vehicle purchases, whether from a dealer or a private party. When there is no merchant, and you have to pay them directly, they're called use taxes. Most state's vehicle registration agencies will insist on getting that money before they issue the new registration. Wish it were not so ... but it is. Sorry to be the bearer of bad news. In fact, many states have started adding use tax lines to their income tax returns. Just for fun. Best wishes, Eva Rosenberg Your TaxMama

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