why do we pay sales tax when buying a used car? isn't this double taxation?

Question

with any other item that is sold used we don't pay sales tax, even when someone else bought it the first time and we buy it the second time.

the only time we pay is when we buy refurbished, but in this case the original sales tax was refunded to the first purchaser.

it just doesn't make sense, and it's only with cars.

Answer 1

It appears based on your question that you may be trying to equate "Sales & Use Tax" with Value Added Tax (commonly used in Europe). In the US you do not pay for only the increase in value from the last point of transfer, you pay for the entire sales price and only "consumers" pay the sales tax. For instance, the company that built the car did not pay tax for all the parts only the end consumer paid the sales tax. Then after using the car he sold it to you and now you also pay sales tax as a "consumer" of the auto. Technically this is not only for cars, if you go to a antique store to buy antiques that have also been used you will be charged sales tax - if you buy clothes form a consignment shop you will be charged sales tax. The only reason you don't see it with individuals is because, unlike a car that has a title transfer, there is no record of the sale and the transfer would be hard to track so individuals get away with not collecting and remitting sales tax.

Hope this helps.

Answer 2

Wow what a bunch of legal mumbo jumbo. Call it use tax, call it sales tax, call it transfer tax - who cares it's the state doing what they do best - fleecing the sheeple. Common sense in this case is clear. Tax was paid originally, when the transfer was made on the used car it was taxed again and again with each transfer. It is not only double taxation it can be any multiple of taxation - in fact if the car transfers tittle enough times the damn state can collect more in taxes than the car's original value. If you think about it money gets taxed every time it moves which is why idiots like our ex president Bush junior encouraged us to shop while he lied to start another war for his buddies in the military industrial complex. A bit off topic but hard not to expand the topic especially when all these pinheads want to blow smoke and call it anything but what it is double taxation to feed the greedy 1%

Answer 3

Because that's the law. How so you reckon that it's double taxation?? You are only being taxed once on the purchase!

Not to split hairs, but the tax on a new car is a sales tax but the tax on a USED car is a USE tax. The rates are the same and the terms are often used interchangeably but it's still a Use Tax on a used vehicle.

Answer 4

You're looking at it from the stand point that the original owner paid tax on it, and now you're paying tax again. However, the state views each sale as it's own unique transaction. It doesn't matter that it's the same asset. From that perspective, no, it's not double taxation.

Answer 5

I think when a buyer of a used car pays tax, that should go to the buyer to compensate the tax that he paid. So that way, the tax is Constant for a certain car. Its just fair from mathematical point of view. But who will change this law?

Answer 6

A sale is transfer of ownership. Each time ownership transfers, that transaction may be taxed.

It isn't only cars. If you bought a piece of estate jewelry from a jeweler, a used watch, coins, etc., your going to pay tax.

Answer 7

Double taxation occurs when the same entity is taxed twice on their income. Because you're not buying the car from yourself, you have only paid tax on the vehicle once, so no, it is not double taxation.

Answer 8

Yes, sales tax is paid every time a vehicle is sold through a dealer in AZ.

Answer 9

Taxing A Used Car