Tax On Used Car

Today TaxMama® hears from Blake in the TaxQuips Forum who is upset. “I bought a used car last December for $8,000. The car was owned by an individual who apparently had a business bank account where he deposited the money. The bill of sale just says his name on it, no company. How can the state of Georgia charge me $700 in taxes plus a $115 penalty on a car I bought from an individual? I don’t have the coins laying around for this kind of “surprise” expense. I was fully under the impression the car was bought from an individual and so were the two witnesses who were there when bill of sale was written up.”

Dear Blake

I don’t think this has anything to do with whether the seller was a business or an individual. It has more to do with your registering the car and transferring title to you.

I don’t know specifically about GA, but in most states any purchase of a vehicle triggers either a sales tax (if a dealer sells it) or a use tax (if a private party sells it). When the dealer sells a big ticket item like a car, he collects it from the buyer and sends it to the state. When a private party sells the car, the buyer needs to pay the state himself.

You could certainly try to get the penalties waived. Try talking to the Georgia Taxpayers Advocate office and see if they can help you. Clearly, you didn’t understand that you were responsible. Let’s face it, there are so many tax laws on the books, how is an average citizen supposed to know them all?

You won’t get the taxes waived, but good luck trying to get the penalties waived. Sometimes, asking nicely, politely and patiently, government officials will go out of their way to help you.

And remember, you can find answers to all kinds of questions about use tax issues and other tax issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]