would i pay sales tax in this situation?

Question

I'm a resident of Texas. I'm purchasing a car in Connecticut. The dealer price I'm paying includes "TT&L", but I'm not sure if I'd even have to pay sales tax in that state anyway... If i'm purchasing the car in Connecticut and driving it back to Texas, would I have to pay sales tax in Texas when I register the car?

Answer 1

If you buy the car in CT, you will have to pay the tax in CT if you are buying from a dealer there. He will have both a dealer's license and a tax permit, and he will be obligated to collect the tax. If CT has some special program that allows a car to leave the state without the payment of sales tax, such programs normally require a form from you or a common carrier (freight carrier's) receipt.

If you do pay tax in CT, make sure the paperwork you have reflects that fact. You will not then be billed for it in Texas. If you do not keep that receipt, the Texas authorities will assume you bought the car here and attempt to collect the sales tax from you when you attempt to register the car here.

My best advice would be to attempt to negotiate a satisfactory deal on the car that does not include the TT&L and then pay the tax in Texas. It not only benefits the home state, but paying TT&L there would still leave you on the hook for T&L (second T) here. It's been almost 35 years since I took my driver's test, but as I recall we are required to transfer car plates to Texas plates somewhere within 10-30 days after we bring the car to live here.

One other thing to consider before making this purchase. One of the reasons used northern cars seem so reasonably priced to us down here is that salt is used to melt snow in those yankee winters -- and that road salt will rust a car out very quickly. This does not seem to be the problem it was back in the 70s and earlier, but I would be wary.

When you do go to register the car here in Texas, expect a little extra time and trouble. Each county will usually have only one location in which the transfer of an out-of-state title can be accomplished, and then only after an official examination of the car to make sure all the vehicle ID numbers match the title. I could be wrong (and likely am), but I do not remember having to pay an extra fee for that inspection.

Be careful and good luck.

Answer 2

You'll pay sales tax in Texas when you register the car there. Most of the time, you can avoid paying the tax in the state you buy the car in as long as you are from another state and will be paying the tax there when you register the car. It's possible though that you'd have to pay CT tax if you need CT temporary tags.

Answer 3

You will have to pay the tax in CT. Then, once you register the car in TX, you will have to pay the difference between CT and TX tax rates as it is allowed in their reciprocity agreement with CT. The reciprocity agreement can give you credit for only the state portion of the tax or both the state and local portion of the tax.

For example, if your car costs $20000 before sales tax and the sales tax rate in CT is 6% (state 4% and local 2%), then you pay $1200 in CT tax. Once you bring the car to TX, and the tax rate is 8.25% (state 6.25% and local 2%), you would have to pay the difference of 2.25% or $450 if there is full receprocity. However, if there is only reciprocity at the state rate only, then you would have to pay another 4.25% or $850 in TX sales tax because you only paid 4% in sales tax to CT even though the total tax rate you paid was 10.25%.

Answer 4

You pay sales tax in the state where you take delivery. If you then bring it to another state (Texas) you will pay use tax, which generally is the same rate as the sales tax.

The credit for having paid sales tax to another state does not apply in all cases. In fact, it is the exception, Go to your state's Dept of Motor Vehicles website & search for "registration"

Answer 5

While you are splitting your time between both yours and the rented property. I dont think you will have to pay cgt on the sale as you can move out and still sell upto 3 years after moving out and the property will be treated as your main residence

Answer 6

You pay sales tax in CT, then take that sales receipt with you and submit it when you register the car in TX. You won't pay sales tax in TX since you paid in CT

Answer 7

dollars to donut holes, yes.

you don't think the politicos in Austin would leave a great big gaping hole like that in their tax laws, would you?

6.25% due at your county tax office when you apply for Texas registraton.

:-)

Answer 8

no