Does buy back $ offset sales tax on a new car?

seth1065 · Jan 2, 2017

In NJ you would be out of luck, VW Corp is buying the car back not the dealer so even if I bought a new 25,000 GTI and traded in my TDI wagon I would pay sales tax on $25000.

Vick · Jan 3, 2017

Tenebrae said:
Hey MO folks (especially on the KC side).
What dealer are you using?
I recently moved back to KCMO.

-T.

I'm using Volkswagen in Lee's Summit. Turn in date on the 23rd.

taldridge · Jan 3, 2017

Best of Luck to all my fellow Missouri TDI returners. I'll be watching to see how things go. I picked up my new vehicle yesterday to avoid paying higher personal property tax at the end of 2017, but will need to license the vehicle at the end of January (or not drive it). I was hoping to avoid paying sales tax on the entire new vehicle price, but it looks like I'll need to follow that process, and try to get my money back from a state with financial issues. Still on step 15, so it may be a while...

Stumiester · Jan 4, 2017

keldar said:
It sounds like you guys are trying to get the original sales tax back that you paid on the car. does anyone know how to get back sales tax from ny? My tdi was bought and registered in ny back in 2012 so I paid ny sales tax.
Or do you mean you can get the sales tax discounted on the new car that you purchase to replace the vw that you send to the buyback? Our new car was purchased and registered in florida.

Some states allow you to take a credit for the sale price from one vehicle and apply it to the taxation amount on the new vehicle. it is totally dependent on the state laws. if your state offers this there would be a DMV form to apply for the credit. similarly some states allow you to waive the tax paid on a vehicle in another state if it's the same vehicle and you have already paid the tax. again it all depends on the state. Don't take the advice from someone out of state because while they may be quoting correct rules for their state, yours may be different. in the case mentioned above, you would ask FL DMV can the tax you paid in NY be credited to FL DMV tax? you will need proof that you paid it, check, receipt, etc.

STRANGETDI · Jan 4, 2017

Vick said:
I had the same question, so I emailed the Missouri Dept of Rev this morning and they e-mailed me back with this response:

Thank you for your e-mail inquiry to the Missouri Department of Revenue.

You will need to pay sales tax on the full purchase price of the replacement vehicle. You may then apply for a refund as long as the buyback is completed within 180 days of the purchase date of the replacement vehicle by following directions below.

To apply for a refund of taxes paid you will need to download the Refund Request Form 426. You will send the form with a COPY of the title application receipt showing taxes were paid on the newly acquired unit and copy of the buyback orders to the address indicated on the form.

Thank you,
Desiree
Motor Vehicle Bureau

What was your exact question? I would like to ask this question to CT Department of Revenue.

Mr. Furious · Jan 4, 2017

I sent a query to the NC DMV to see if they do any sort of arrangement like that. They were very responsive and helpful when I sent a registration-related question recently, so I'm hopeful that I'll at least know either way soon.

Mr. Furious · Jan 5, 2017

Mr. Furious said:
I sent a query to the NC DMV to see if they do any sort of arrangement like that. They were very responsive and helpful when I sent a registration-related question recently, so I'm hopeful that I'll at least know either way soon.

DMV got back to me today. Unfortunately, NC owners will be responsible for 100% of the Highway Use Tax on whatever vehicle they purchase.

CT_White_SRT · Jan 5, 2017

STRANGETDI said:
What was your exact question? I would like to ask this question to CT Department of Revenue.

I would love to hear what you hear from CT.

Cincy_TDI · Jan 11, 2017

S2000_guy said:
Please share the outcome. I had planned on driving my '14 JSW until late 2018, but the four-year limit on the tax refund might cause me to opt for a turn-in date before September '17. If indeed a buyback for less than full purchase price somehow qualifies.

Just received notice from the State of Ohio Business Tax Division I now have a claim number and they work them on a first in first out basis. Sent the paperwork in on 12/23 so they have a slight delay. Hopefully they will accept my request for a refund on my original taxes paid on the 2015 VW and refund me that money. They should since the car was returned to VW...

Will follow up if I get anymore information..

atomicfront · Jan 11, 2017

For MARYLAND buy backs. I found this on MD MVA site and it appears we should get tax back:

http://www.mva.maryland.gov/about-mva/info/27300/27300-51T.htm#contact_info

S2000_guy · Jan 11, 2017

Cincy_TDI, please keep us informed on your progress.

STRANGETDI · Jan 11, 2017

CT_White_SRT said:
I would love to hear what you hear from CT.

This is what I sent to Revenue Services:

"Hello,

Now that VW has agreed to buy back the affected TDI models that are part of the emissions scandal, are us original VW TDI purchasers entitled to a sales tax refund that we originally paid for the vehicle when we sell the car back to VW?

I am seeing other states offering a sales tax refund for these affected models.

Any information you can provide would be helpful."

CT_White_SRT · Jan 11, 2017

STRANGETDI said:
This is what I sent to Revenue Services:

"Hello,

Now that VW has agreed to buy back the affected TDI models that are part of the emissions scandal, are us original VW TDI purchasers entitled to a sales tax refund that we originally paid for the vehicle when we sell the car back to VW?

I am seeing other states offering a sales tax refund for these affected models.

Any information you can provide would be helpful."

I think the other states are when they purchase another vehicle (offset)

My guess is they will respond and say no.

Airpizz6 · Jan 11, 2017

atomicfront said:
For MARYLAND buy backs. I found this on MD MVA site and it appears we should get tax back:
http://www.mva.maryland.gov/about-mva/info/27300/27300-51T.htm#contact_info

That's not how read this. Vehicle has to be a buyback or a lemon.

An agreement to buyback a vehicle (new or used) must occur within the first 60 days of ownership. Guess that would equate to receiving an offer. Can't imagine many folks could pull that off under the existing timelines we all have been seeing. And it has to be the dealer agreeing to the buyback. The dealer is not even involved in the current VW/Audi buyback.

For a vehicle to qualify as a lemon it must be a new vehicle and meet one of the three problem areas listed - in the shop for the same problem 4 times, out of commission for 30 consecutive days or have a steering or braking problem. No dice on any of those.

As usual we in MD take it in the shorts.

atomicfront · Jan 11, 2017

Airpizz6 said:
That's not how read this. Vehicle has to be a buyback or a lemon.

An agreement to buyback a vehicle (new or used) must occur within the first 60 days of ownership. Guess that would equate to receiving an offer. Can't imagine many folks could pull that off under the existing timelines we all have been seeing. And it has to be the dealer agreeing to the buyback. The dealer is not even involved in the current VW/Audi buyback.

For a vehicle to qualify as a lemon it must be a new vehicle and meet one of the three problem areas listed - in the shop for the same problem 4 times, out of commission for 30 consecutive days or have a steering or braking problem. No dice on any of those.

As usual we in MD take it in the shorts.

I am going to send in my stuff and when they reject call my state senator, state house member and governor.

Someone has to start the ball rolling for us to get our tax refunded.

I even had to pay tax on the VW loyalty incentive. The state has a good racket going.

nattyboh2027 · Jan 12, 2017

atomicfront said:
I am going to send in my stuff and when they reject call my state senator, state house member and governor.

Someone has to start the ball rolling for us to get our tax refunded.

I even had to pay tax on the VW loyalty incentive. The state has a good racket going.

Are there any forms that could back up a tax credit like MVA's bill of sale?

STRANGETDI · Jan 23, 2017

Got this email today:

Thank you for contacting the Department of Revenue Services. This is a general information e-mail in response to your recent inquiry.

A State of Connecticut Department of Revenue Services Media Release dated October 11, 2016 addressed the proposed settlement between Volkswagen/Audi, the U.S. Department of Environmental Protection and other regulators in response to software installed in certain Volkswagen and Audi diesel cars that gave false readings to pass emissions testing.

Owners of 2009 through 2015 TDI 2.0-liter diesel Volkswagen or Audi cars have two choices under the settlement:

1 - Cash for the “buyback” of the car (or early termination of the lease), or
2 - Keep the car and have modifications done to the emissions software, plus receive cash.

If the owner chooses to take the buyback payment and use it to purchase another car, Connecticut sales and use taxes will be due on the purchase price of the car, including the buyback amount. There is no trade-in credit.

This is not a typical ‘trade-in’ under Connecticut law where a motor vehicle dealership accepts a vehicle from a customer as a trade-in and applies a credit toward the price of another vehicle. Instead, there is one transaction in which the customer is being paid for his sale of the car back to VW, and then a second transaction where the customer uses that payment to purchase another vehicle from a dealership.

Normally, when a car is traded-in, sales and use tax is applied on the difference between the taxable sales price of the vehicle being purchased from the dealership and the amount allowed by the dealership on the car being traded in. Under this scenario the trade-in reduces the sales tax amount owed on the car being purchased.

If the owner chooses to keep the car and have the modifications made to the emissions software, there are no sales tax implications for the owner of the car.

The FTC has consumer information on the VW settlement: What does the record VW settlement mean for you?, and Early VW buyback offers could cost you.

Thank you for your inquiry. Please let us know if we may assist you further.

Airpizz6 · Jan 23, 2017

STRANGETDI said:
Got this email today:

If the owner chooses to keep the car and have the modifications made to the emissions software, there are no sales tax implications for the owner of the car.

Wow, no sales tax charged if one gets the fix. That surely is most generous of them. But the fact that it is even mentioned makes me wonder if they are thinking about it. The main mission of any state government is to come up with new ways to generate income.

Rico567 · Jan 23, 2017

So (and someone correct me if I haven't kept track of this thread and others very well) all we know for sure at this point is that one state out of 50 (Vermont) will for sure give some sales tax money back, because at least one person on this forum states that they have received a check back from the state. It looks like there may be hope in OH and MO, but nowhere else. To avoid the inevitable speculation, since I live in IL I went the IL Dept. of Revenue's web site, and they are very explicit: there are several ways of getting a sales tax refund, but VW's buyback is not one of them, no how, no way.

STRANGETDI · Jan 25, 2017

I wonder if the CT sales tax due on the buyback amount will need to be reported by the owner based on his own honesty or if the DRS is some how notified through the paperwork.

Most people who sell their used cars (or other stuff for that matter) do not report that income, so they don't get taxed for it.

DanB36 · Jan 25, 2017

Sellers of used cars aren't responsible for paying sales tax; buyers are (in states where there's a sales tax). Money you receive for selling something isn't ordinarily income unless you receive more than you paid for it.

Yukon4Runner · Jan 26, 2017

You are confusing sales tax and income tax.

STRANGETDI said:
I wonder if the CT sales tax due on the buyback amount will need to be reported by the owner based on his own honesty or if the DRS is some how notified through the paperwork.

Most people who sell their used cars (or other stuff for that matter) do not report that income, so they don't get taxed for it.

STRANGETDI · Jan 27, 2017

I believe you are correct.

Cincy_TDI · Feb 10, 2017

State of Ohio has rejected my request for the return of the initial sales tax on the purchase of my Jetta. The reason to deny my claim is I received less than my actual purchase price of the vehicle so they have a clause that allows the rejection.

I can appeal back to the same group. They said they will deny it automatically which then Goes to a tax board and I have to go to Columbus to stand before the board for the appeal. They said they had a meeting the other day because they have received a lot of these and this was the way to get out of paying back the sales tax.

Had VW refunded the full purchase price I would have received my sales tax back they said.

S2000_guy · Feb 10, 2017

That was explained in the instructions for the request form. But as you said earlier, it only cost a little time and money to find out if the instructions were correct.

Since I'm in Ohio and will get back less than I paid for my JSW, I'm in the same boat as you.

BleachedBora · Feb 10, 2017

Glad I'm in Oregon...

jables · Feb 13, 2017

I just called the Louisiana department of revenue and their is not way to apply for a credit if you sell you're vehicle private party and then buy a new one.

chiefstdi · Feb 24, 2017

Everybody in Missouri.

I can confirm that MO will refund your state and local taxes.

I received my check yesterday.

I had submitted my documentation the first week of January.

You need to send Form 426 along with a copy of the new vehicle title receipt and a copy of the buyback documents.

alightner · Feb 24, 2017

chiefstdi said:
Everybody in Missouri.

I can confirm that MO will refund your state and local taxes.

I received my check yesterday.

I had submitted my documentation the first week of January.

You need to send Form 426 along with a copy of the new vehicle title receipt and a copy of the buyback documents.

Thanks for the info... can you tell me if they gave you the credit on the full buyback amount or just the "vehicle value" portion. IE was restitution portion of the payment included or excluded in the sales tax credit?

chiefstdi · Feb 24, 2017

There was no breakdown given.

Received $1795. of the $2000. I paid in State and local sales tax.

Better than I was expecting.

Since I purchased a vehicle that was less than the buyback I received.

Does buy back $ offset sales tax on a new car?

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