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Sales Tax on Vehicle

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ccal28

Junior Member
What is the name of your state? New Jersey

My permanent residence is in PA (owned by my parents), however because of my job I rent in New Jersey and stay there when my job requires me to stay in New Jersey for an extended period of time.

I recently traded in my old car for a new car in New Jersey. My trade-in was registered & liscensed in PA. The old car title was in my granfathers name (lives in NJ) & mine (lives in PA) at the time of purchase. So I paid PA tax.

When I purchased my new vehicle I am the only one on the title and paid PA sales tax. However I guess when the car dealership submitted the information to New Jersey they stated that I may owe them NJ tax.

The dealership says that b/c I do not "own" property in New Jersey that it should not be a problem and just tell them that if they want the tax that they would have to get it from PA.

I'm a little hesitant to say that b/c I'm not sure what my legal rights are. If I had someone that lives in my house in PA co-sign on the title, am I within my rights to the PA sales tax since that is a permanent residence and rent in NJ? Or do I have to pay the NJ sales tax? If I have to pay NJ sales tax, how can I get the PA tax back?

Thank you.
Ccal28
 


efflandt

Senior Member
If you bought a car in NJ intending to register it in NJ, why did you pay "any" PA sales tax on it at all? You should have had them title and register it in NJ, and paid whatever NJ sales tax was due.

It would be different if you purchased a vehicle in PA and then wanted to transfer it to NJ. Then you typically have to pay the difference between sales tax actually paid to PA and what NJ would charge, if higher. It would be even more confusing if it was a vehicle you had in one state for years before transferring it to another state.

Possibly adding to the confusion is which state is used for income tax address, and in which state do you have your driver's license. Although, in the case of our company vehicles, they are titled to our company in California, but sales tax and registration are based on the state they are used in (local sales offices or employees with home offices in some cases).

Search for "sales tax" or "use tax" for the states involved and see what their regulations say. But if it is bought, registered, and used in NJ, I don't see why PA should have even entered the picture. Although, it could get fuzzy if you want to title it in PA, but register it in NJ.
 

ccal28

Junior Member
sales tax on car

I bought the car in NJ, b/c they had the vehicle I wanted. I have no intention of registering in NJ since I only rent b/c of my job. I have no longterm plans to own property in NJ. My concern is the letter that I have to write, just b/c I'm not sure what the legal rights are.

That's why I think that if I put another person that I live with in PA on the title that doesn't rent in NJ that they wont charge me sales tax in NJ. As you know the difference in sales is 1%, but I'd like to save the money. The dealership said since I don't own/live in NJ and only rent & stay there once in a while that since my trade-in car is regsitered in PA and license is in PA that I pay PA sales tax since my intention is to stay in PA.

All my titles & paperwork are in PA since my permanent address is there.

Any help on this is appreciated. Thanks.
 

efflandt

Senior Member
You still need to check the sales tax or use tax policies for vehicles in each state. Typically you pay sales tax based on where you take "delivery".

If you bought it and picked it up in NJ, you would typically pay NJ tax, and then provide proof of tax you paid to NJ when you register it in PA. So it is possible that the dealer made a mistake not collecting full NJ sales tax, especially if that dealer has no dealers in PA where you could have taken local delivery.

An analogy is that if I live in Kane county and buy a car in Cook county, the dealer collects the extra 1% Cook county tax whether I live there or not. If I bought a car in Kane county, I would not pay that 1% tax. But if I lived in Cook county and bought a car in Kane county, I would still need to pay that 1% extra Cook county tax before the car could be registered in Cook county.

So you likely are liable for the full NJ tax, regardless whether the dealer credits that all to NJ or splits that between PA and NJ.
 

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