Paying taxes on a scrap vehicle?

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  • TheBigRServices

    Well-Known Member
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    2   0   0
    Jul 29, 2016
    157
    18
    Loranger, La
    I bought a 1972 Ford bucket truck that is in bad shape with hopes of fixing it up and using it around the place. It is titled in Mississippi but the seller moved to Louisiana and never re-titled in Louisiana. I took paperwork to a local title place and they are telling me I have to pay taxes on both transfers which I guess I understand, but that I also have to pay taxes on the value of the truck, which they say is $22,000. This is absurdly different than the real value of the truck which I paid 500$ for. I am wondering if there is a way to pay taxes on an agreed or appraised value or something like that, instead of "the closest thing they can find in the NADA book".
     

    El Pozzinator

    Well-Known Member
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    1   0   0
    Jul 29, 2012
    222
    18
    Denham springs LA
    This state is flat out criminal with vehicle taxes. I’m sure if they could get away with it they’d come in your house when you move here and inventory your household goods to tax you on those too.

    You could Montana llc but that’s gonna be about 850


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    Bigchillin83

    Well-Known Member
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    94   0   1
    Feb 27, 2012
    6,188
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    Livingston
    Do you have a bill of sale or maybe find a bill of sale *wink wink* with the proper sell value that was paid...I’m pretty sure they have to go off of that, if there isn’t one then they can adjust the value... or lots of times go to the mom and pop tt&l and they can help you out a lot more than the dmv
     

    SouthernUnderGod

    Well-Known Member
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    0   0   0
    Nov 28, 2016
    202
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    Baton Rouge, LA
    How long was the truck in Louisiana before it was sold? If it was 90 days or so, it’s a Mississippi vehicle. If it’s a lot more, the owner is obligated to pay sales tax.

    If the owner owes tax, he cannot convey it until the tax is paid. The only exception would if you agreed to pay the tax as a part of the consideration in the agreement.

    Thinking about agreements, you should have one. The transaction needs a sale agreement, in which the ownership and clear title (with no tax liability) is warranted by the owner. Again, unless you agreed to pay the tax as a part of the consideration in the agreement.

    If the value can be proven to legitimately be $500, the tax should be based on that. I doubt that you can accomplish this at a neighborhood motor vehicle agent. You will need to convince a State motor vehicle department manager that you are not scamming the State out of its tax revenue. That will probably require the investment of several hours of time at DPS Motor Vehicle Office.

    If you plan on driving it, you must obtain a license plate and a registration (and insurance and a valid drivers license.)

    It’s possible to scrap the vehicle and thereby change the tax status of the truck. However, if you plan on using it, you would have to undertake the paperwork to create a new title and registration once it is street legal.

    If the vehicle has not ever been registered in Louisiana, and if the owner still has a valid Mississippi driver’s license, license plate and registration, you might be able to execute a Mississippi sale agreement. If you don’t domicile it in MS and are taking it to LA, then you would owe LA tax, not Mississippi.

    Once upon a time people used to buy vehicles in another state to skirt the tax. However we now have computer systems to track down tax avoiders.

    Depending on how bad you want this, the most practical thing might be to just pay an attorney a couple hundred bucks to fix the problem.


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    krotsman

    Well-Known Member
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    104   0   0
    Aug 2, 2012
    1,364
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    Baton Rouge
    I had a notarized bill of sale on a fixer upper classic car that they accepted in lieu of a fair market tax value. It was several years ago, though.
     

    Bigchillin83

    Well-Known Member
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    94   0   1
    Feb 27, 2012
    6,188
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    Livingston
    You can have any bill of sell notarized after the fact as long as it has buyers signature, sellers signature, and I think one witness, maybe 2, if you the buyer bring the paper along with the witness that signed to verify the transaction at a earlier date they will notarize it...at least I have done this several times in the past, not sure if this is still allowable, if so it would give you a notarized bill of sell for $500 and should be Valid for tax’s purposes
     

    TheBigRServices

    Well-Known Member
    Rating - 100%
    2   0   0
    Jul 29, 2016
    157
    18
    Loranger, La
    How long was the truck in Louisiana before it was sold? If it was 90 days or so, it’s a Mississippi vehicle. If it’s a lot more, the owner is obligated to pay sales tax.

    If the owner owes tax, he cannot convey it until the tax is paid. The only exception would if you agreed to pay the tax as a part of the consideration in the agreement.

    Thinking about agreements, you should have one. The transaction needs a sale agreement, in which the ownership and clear title (with no tax liability) is warranted by the owner. Again, unless you agreed to pay the tax as a part of the consideration in the agreement.

    If the value can be proven to legitimately be $500, the tax should be based on that. I doubt that you can accomplish this at a neighborhood motor vehicle agent. You will need to convince a State motor vehicle department manager that you are not scamming the State out of its tax revenue. That will probably require the investment of several hours of time at DPS Motor Vehicle Office.

    If you plan on driving it, you must obtain a license plate and a registration (and insurance and a valid drivers license.)

    It’s possible to scrap the vehicle and thereby change the tax status of the truck. However, if you plan on using it, you would have to undertake the paperwork to create a new title and registration once it is street legal.

    If the vehicle has not ever been registered in Louisiana, and if the owner still has a valid Mississippi driver’s license, license plate and registration, you might be able to execute a Mississippi sale agreement. If you don’t domicile it in MS and are taking it to LA, then you would owe LA tax, not Mississippi.

    Once upon a time people used to buy vehicles in another state to skirt the tax. However we now have computer systems to track down tax avoiders.

    Depending on how bad you want this, the most practical thing might be to just pay an attorney a couple hundred bucks to fix the problem.


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    I have a notarized bill of sale stating I paid 500$. So my understanding is I pay taxes on that. The seller owes taxes from when he moved from Mississippi to Louisiana and he owes that, but I can't get it titled unless I pay those taxes or him. (but I'm sure thats no gunna happen). I would not have a problem paying a couple hundred bucks to have it all "fixed". I don't plan on driving it around much, maybe a few miles to work to use it there. I don't want to be in a predicament where I have a problem in the few miles its driven and I don't have it licensed and insured. Other than that I wouldn't worry about it since I'll just be using it around the house.
     

    kcinnick

    Training Ferrous Metal
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    28   0   0
    Dec 24, 2008
    4,723
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    Baton Rouge
    I have never needed a bill of sale, especially a notarized bill of sale. I just walk into the title place, they ask how much I paid and that's it. I would go to another title place.
     

    Bangswitch

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    1   0   0
    Jan 10, 2019
    2,221
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    a location near you
    You think Louisiana cons you on tags? When I moved to Louisiana I was shocked to pay sales tax on an old beater because here MS sales tax stops on private transactions at the 10th model year. But I moved back to MS a couple years back and I just recently paid $700 to tag a travel trailer that I had already paid sales tax on, because here in Mississippi you pay Ad Valorem on Msrp on new purchases (minus some statutory reductions) and the Ad Valorem in Lamar county on RV’s is 7% of assessed value. So I will be paying the equivalent of sales tax on the value of this camper every year indefinitely. Also you can’t buy permanent plate for trailers. And my truck tag cost me the same for 1 year as it used to for 4 years. And I live in a county with low taxes.
     

    dantheman

    I despise ARFCOM
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    65   0   0
    Jan 9, 2008
    7,440
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    City of Central
    The post says " scrap vehicle " . If you are going to drive it on the road it's not " scrap " and you are going to have to pay to play . If you're going to only use it on private property then it's a moot point . What did I miss ?
     

    TheBigRServices

    Well-Known Member
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    2   0   0
    Jul 29, 2016
    157
    18
    Loranger, La
    The post says " scrap vehicle " . If you are going to drive it on the road it's not " scrap " and you are going to have to pay to play . If you're going to only use it on private property then it's a moot point . What did I miss ?

    The point I am trying to make, is that it is worth and bought at "scrap" price, not $22,000. I understand paying taxes on what it is worth. I don't understand paying taxes on 2,000% what it is worth. I guess that is what you missed. If someone moved to Louisiana with a 1989 Ford Ranger and the Title place said its worth $22,000, you owe us $1639, that is not "pay to play".
     

    TheBigRServices

    Well-Known Member
    Rating - 100%
    2   0   0
    Jul 29, 2016
    157
    18
    Loranger, La
    But why pay taxes at all ? Are you trying to get a plate ?
    I am not getting a plate on it now, I really just wanted to get the title done in my name so I can legally own it and sell it if I want or get it licensed in the future, and evidently you have to pay taxes on it to do that. Good new is I was able to get it done today by going to a different office and asking a few more question about how they were trying to determine the value of the truck.

    So apparently when they don't see NADA value on a vehicle they just search around on the net looking for similar vehicles and their sale price to determine it's value. I was able to give a little more input during their search and they found a more similar vehicle with a more similar price although I still had to pay like 800$ in taxes on a 500$ vehicle. If there is a next time for me I will come prepared with some links to a few vehicles with a good sale price. Thanks for the input guys!
     

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