A skit about people lying about how much the car they just bought cost is making people on the internet nostalgic.
Instagram user Driveway Finds (@driveway_finds) is a page dedicated to car comedy from Dustin Hallinan and John Birto. In a since-deleted video posted on Aug. 1, the duo portrays a personal vehicle sale between friends. Cash in excess of $500 and a car title exchange hands. Meanwhile, a shadowy figure monitors the situation from afar.
âThe DMV knowing you arenât buying cars for â$500â but they canât prove it,â reads the on-screen text.
Paying Taxes on Used Vehicles
Letâs take Texas, for example. In the Lone Star state, buyers who buy from private sellers are obligated to pay a 6.25 percent sales tax on either the purchase price or standard presumptive value (SPV). How do you know which one? You guessed itâwhichever is higher.
How does the state prevent people from doing whatâs portrayed in the skit? Well, if you tell the DMV that you paid way less than the vehicle is actually worth, youâll have to get the car appraised and pay sales tax on that amount.
However, itâs important to note that the law exempts certain vehicles from this requirement. Those include
- New vehicles
- Vehicles purchased from licensed dealers
- Vehicles bought at a foreclosure auction
- Vehicles that are 25 years old
- Dirt bikes and ATVs
- Salvaged vehicles
- Vehicles sold through storage lien
- Gifts
- Even-trade vehicles
Viewers React to the Skit
In the comments section, many viewers vented their frustration with the tax system in the United States. âThere should be no tax the second time somethingâs sold,â wrote one person. âStop taxing the same thing over and over.â
âRemember kids: Not paying taxes is the oldest of American traditions,â wrote another user.
Others offered strategies for getting around this rule. âMine are all $100,â joked one person.
A second person simply said, âWriting âgift.ââ
ââEngine blewâ is my favorite line,â wrote a third person.
Is It a Good Idea to Fib on the Purchase Price?
A Reddit user posed this question to r/AskReddit about 15 years ago after agreeing with a private seller to list a lower purchase price of a used vehicle heâd just acquired. âHas anyone gone through this? What does the DMV catch things like this? What would the consequences be if caught?â the person asked.
One person in the comments replied, âI donât think I have ever heard of a person NOT doing this.â
A second person agreed. âUnless you make it SO obvious that the price you gave is phony, they arenât going to care,â they wrote.Â
But what are the consequences if you do get caught? Well, it depends on where you live and where you purchased the car. In Utah, for instance, car buyers who underreport the purchase price of their used car can be subject to a 100% fraud penalty. That means youâll be required to pay double the amount you underreported.
Motor1 reached out to Driveway Finds via Instagram direct message and email for comment.
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