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I'm going to get eaten alive on Texas State car tax!

Discussion in 'Model X' started by Darmie, Aug 15, 2018.

  1. Darmie

    Darmie Supporting Member

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    We placed an order on a 100D this last week. We were fortunate enough to have sold our Model S for what we were asking for. Tesla only offered us $38,000.00 for trade in. I know this would have helped the final tax calculation.
    Here in Texas, the rate for new car tax is 6.25% Motor Vehicle Sales and Use Tax
    This is crazy. Well, there goes my federal tax credit. ...and to think the state of South Carolina has a cap of $500.00. To me, this is a sad part of the excitement with Tesla ownership. Please share any thoughts, ideas or consideration.

    Based on some simple calculations, I’m looking at loosing over $7,000.00. This is a big hit in our world.
     
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  2. GWord

    GWord Member

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    Itemizing it on your income taxes might help. I found that Texas Direct Auto gave me a better price on my used Tesla than a trade, to the tune of around $15k. It more than offset the loss of the trade reduction from the sales tax burden. Something to consider.
     
  3. TexasEV

    TexasEV Well-Known Member

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    You pay sales tax when you buy something. Actually a car is one of the few sales tax "bargains" in Texas as only state sales tax is charged, not local sales tax (which could add another 2% in some jurisdictions). Remember Texas doesn't have an income tax. If you can't afford to pay the sales tax when you buy something, you can't afford what you're buying.
     
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  4. brkaus

    brkaus Active Member

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  5. Need

    Need Active Member

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    You are lucky that you get to take off the trade in before sale tax is added. We don't get to do that here in CA. :(
     
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  6. GGMk

    GGMk Member

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    Stop complaining - In Bellevue, WA you pay ~10% tax plus ~$1K registration every year.
     
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  7. Darmie

    Darmie Supporting Member

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    Yes, I seen on turbotax you can itemize so we'll see. Wow, same place that purchased my Model S. Wonder what gives.
    Wow! Ok, you have it worse. Beautiful state though.

    It's more of an eye awakening experience. When we purchased the S last year, we had a good amount offered on our trade in so the actual taxed amount was low.

    I'm sure CA needs all the help they can get. Here in Texas, most all tax somehow ends up helping the school system, and wow, you should see some of these city block new school houses. Oh, and they most all have a good football team.
     
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  8. jelloslug

    jelloslug Active Member

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    That's not really possible anymore for most people with the "tax reform" that was passed.
     
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  9. mattack4000

    mattack4000 Member

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    You guys have no income tax, cheap labor and no healthcare. Of course your taxes are low and you have to fund the school with your property taxes. They still shaft you either way, depends on how steep and how they get you.



     
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  10. Struja

    Struja "Fanboy"

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    Up here in the Great White North, we call that a bargain! 13% in sales tax on a new Tesla for those of us in Ontario.

    Our $14,000 rebate got removed as well, so a Model X,, 100D will run you around $24,000 in sales tax.
     
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  11. Naonak

    Naonak Member

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    Haha 6.25% how cute. It's 9.75% here. My taxes on my P90DL were almost 18,000 after all the taxes and fees.
     
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  12. ek993

    ek993 Member

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    7.75% sales tax and 2.7% annual property tax assessed on 70% of the cars book value. Add on top of that state taxes and living in CT really sucks.
     
  13. Darmie

    Darmie Supporting Member

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    Wow, I can't imagine.

    Oh yes, I do remember hearing this about the state tax deductions. Nothing left to do except, "Suck it up buttercup"

    Just amazes me the revenue a state receives on just one purchase.
     
  14. SSedan

    SSedan Member

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    So raising the standardized dedication simplifying taxes so few people have to itemize is bad?
     
  15. mattack4000

    mattack4000 Member

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    Yes because they unfairly target people with high income tax states and high property value.
     
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  16. dethman

    dethman Member

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    yeah that's actually a pretty good tax rate. you also get the benefit you get the deduct the purchase price of your trade in.

    in CA we will pay about 8-10% on the full price of the new vehicle, with no benefit of trade in. ridiculous how much money the state gets but still feels bankrupt.
     
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  17. jelloslug

    jelloslug Active Member

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    The standard deduction was raised by the amount of the personal exemption that was removed plus $500 to $1000 or so. The personal exemption was a big chunk of what many people used to itemize with, combine that with the loss of the state income tax deduction and the caps on mortgage interest and a lot of people this year are in for a big surprise. Also, since the personal exemptions are now gone, people with children are going to get a double whammy since the new child tax credit is not nearly enough to cover the loss of the personal exemptions.
     
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  18. LukasSwan

    LukasSwan Member

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    Yup. Try Nova Scotia. 15% and never had an incentive.
     
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  19. TexasRat

    TexasRat Member

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    I'm also from Texas, but I see this entirely different than the OP does. 6.25% is a steal! Honestly, a lot of states have it worse. As was said earlier, I remember reading that CA has > 9% tax on cars and you get taxed on the entire purchase price, not the purchase price minus the trade-in value.

    I always factor the 6.25% into the car value, which is why I had Tesla buy the car via trade-in after being adjusted for a Carmax quote. I wouldn't be able to get enough via private party to justify selling it myself.

    Also to the OP, I don't understand how you are losing over $7k. If you had traded in your car to offset the price, you would have only saved 6.25% on the difference in trade-in value. Unless you were trading your model S in for $112,000, you would not have lost $7000.

    If Tesla offered you $38,000 on your car, then their offer to you is in reality, $38,000 * 1.0625 = $40,375. As long as you sold the car for more than that, you're still coming out ahead. I think you're either misunderstanding our tax law, or did some extremely funky math.

    I personally have no problem paying sales tax on a new car. It's a lot of money, but Texas does it right, imo (as do other states). Normally sales tax is a regressive tax in that it hits lower income families disproportionately. They negate this by making food and basic necessities exempt from sales tax. A new Tesla is far from a necessity and absolutely a luxury. I'm more than happy to pay the tax that is used to fund the state's programs.

    As was mentioned earlier, you need to absolutely take into account sales tax when figuring total cost of ownership (as well as maintenance, [PPF, ceramic coat :D :p] and anything else that you add to the car).

    At the very least, recalculate how much money you "lost" in sales tax so that you'll make yourself feel a whole lot better. You probably lost something closer to $3k, though I have no idea what you sold you car for.
     
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  20. TexasRat

    TexasRat Member

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    Oh and as far as being able to write the sales tax of a car off, I doubt it. With Trump's new tax laws in effect, SALT is capped at $10k. That's less than my property tax alone. There's no more write-offs to be had! The only way you'd be able to write off the entire sales tax of a car is if you rented. And ... if you rented, well you can best bet your landlord passed off his/her property tax bill to you reflected in your monthly rent :D

    No one gets ahead ;)

    The way I see it, you're only paying taxes if you're making money. If you're paying taxes and buying a Tesla, you're in REALLY good shape compared to the rest of the country :)
     
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