Do you pay taxes on a vehicle by the value or the amount you give?

Question

I just bought a vehicle. It is a 1999 expedition and has a pretty high value, but I only gave 1,050.00 for it. When I go to transfer it am I going to have to pay taxes on the amount I gave or what it's worth? I have a bill of sale proving what I give for it. I know they have an affadavit for vehicles if you give 500 or less.

The state I live in is Kentucky

Answer 1

It depends on the State. In CA, they charge taxes based on the "value" of the vehicle. In most cases CA will accept the value you paid for the vehicle as the value of the vehicle. However, I know in CA, they have the right to increase the "value" of the car if they feel you underpaid, or are trying to cheat the system, even if a bill of sale shows the actual price you paid for it.

Answer 2

In Illinois its what you paid for minus discounts and trade (but not factory rebates)

If you bought a 20,000 vehicle with a 1,000 rebate, and the dealer knocks another 1,000 off. Your trade value is 10,000. So its 19,000 - 10,000 = 9,000 trade difference - 1000 rebate = 8000 + TTL, but your taxed on 9000.

Actually, I'm not 100% sure about the rebate thing, its been over 2 years.

But, since you have a BOS stating what you paid, you should be good to go.

Answer 3

it used to be by how much you paid for it but they changed it to the value of the vehicle.

Answer 4

in my state, texas, i know when i transferred the title to my name they did it on what i paid for it. but now i think they know alot of people are lying , so now i think they do it on blue book value. you might need to call your local courthouse and just ask