Sales tax on out-of-state race car purchase

[jturrell]

Here's a quick question that has been on my mind for a while . . . .

If one purchases a race car out of state, at what point does he/she pay sales tax on the vehicle? Tax would not be collected by the seller, as the vehicle is being purchased out of state. The vehicle would not be registered because it's a race car, so you wouldn't pay taxes then.

When/where do you pay the taxes?

[jhnmdahl]

Does the car come with a title or Manufacturer's Certificate of Origin? If you transfer the title to you, you pay tax then.

[codymac]

You don't unless you're transferring the title.

If you're transferring the title, you pay them when you turn in the old title and apply for a new one.

[jturrell]

I should get a bill of sale, but no title.

[codymac]

Originally Posted by jturrell

I should get a bill of sale, but no title.

Since TX won't accept that as proof of ownership, they shouldn't have any problem refusing any tax money you want to give them either.

(You can apply for a "bonded title" but be prepared for a real PITA since none of the DOT folks will know what it is.)

[kverges]

Never. Tax is collected only if you register the car. It is common to buy race cars on bill of sale with logbooks and, if imported, DOT/EPA paperwork (saying vehicle may never be used on a public highway). If it is a converted street car, I would want the title so I can be sure car was not stolen, but still do not register it.

[foosh]

Originally Posted by kverges

Never. Tax is collected only if you register the car. It is common to buy race cars on bill of sale with logbooks and, if imported, DOT/EPA paperwork (saying vehicle may never be used on a public highway). If it is a converted street car, I would want the title so I can be sure car was not stolen, but still do not register it.

Generally you would be correct, except for one hitch. If he wants a state title as proof of ownership from his state of residence, they'll get him for state sales taxes just as if he were registering it. Most people apply for title and registration at the same time, and the applicable sales tax is the same.

If he chooses to go with whatever ownership documentation came from the previous owner, and forego the title, you would be correct. If you go that route, just make sure the bill of sale is notarized.

[fishguy]

Originally Posted by kverges

Never. Tax is collected only if you register the car. It is common to buy race cars on bill of sale with logbooks and, if imported, DOT/EPA paperwork (saying vehicle may never be used on a public highway). If it is a converted street car, I would want the title so I can be sure car was not stolen, but still do not register it.

+1
kverges is exactly right.
My spec miata and the DB-1 were both purchased out of state, and the was no taxes paid on either.
The Miata has a title, but i believe somewhere it says that it cannot be registered for street use, and would need an inspection to get the title changed.
The Db-1 has no title(and never did), just a bill of sale.
What kind of car are you getting?

[codymac]

Originally Posted by kverges

Never. Tax is collected only if you register the car. It is common to buy race cars on bill of sale with logbooks and, if imported, DOT/EPA paperwork (saying vehicle may never be used on a public highway). If it is a converted street car, I would want the title so I can be sure car was not stolen, but still do not register it.

Actually, in Texas, the tax is collected when the vehicle is titled - not when it's registered.

But, if there's a signed (and preferably undated) title in hand, I wouldn't bother transferring it.