shovelhd
Veteran Member
So what happens if you buy a car that costs less than the price of the buyback? Do you pay no tax? This could be a fairly common situation for this program.
That's because you have to pay property tax on vehicles every year. And in the S.C. county I used to live in (Dorchester) it's 6% of the fair market value....every year. In Texas, its 6.25% one time sales tax.The sales tax in the great state of South Carolina where I reside is capped at 300$. So no matter if you buy a 4 grand used car or a 400 grand Lamborghini, the most you would pay in sales tax is 300$
Guess that explains why I saw so many s---boxes last time I drove through the Palmetto state.That's because you have to pay property tax on vehicles every year. And in the S.C. county I used to live in (Dorchester) it's 6% of the fair market value....every year. In Texas, its 6.25% one time sales tax.
I completely agree. Didn't mean to imply they would give guidance prior to final settlement. The guy in the tax office so much as said that. But they can begin to prepare - read where this is at today and be ready to go with guidance once the final settlement has occurred. At the very least, we should communicate to that office that citizens are interested in this and expect guidance once the settlement is final. Basically what you said above..... I doubt the comptroller's staff is going to do much at this point. Lawyers operate on written documents. Until the federal judge has approved the VWoA agreement and the lawyers publish it there is nothing for the comptroller's lawyers to read and interpret.
One would think that of the 1200 comments submitted to the court, this issue probably had more than its share of the total quantity. I'm not expecting any real changes in the final settlement, but it would be great if Judge Breyer at least acknowledged this issue in his conclusions and recommended that the various states consider some type of compensation. That might break the inertia somewhat and might lead to something positive. Of course, I'm just dreaming.I completely agree. Didn't mean to imply they would give guidance prior to final settlement. The guy in the tax office so much as said that. But they can begin to prepare - read where this is at today and be ready to go with guidance once the final settlement has occurred. At the very least, we should communicate to that office that citizens are interested in this and expect guidance once the settlement is final. Basically what you said above.
Yes I was actually thinking this myself. Especially the idea that there probably aren't going to be any major changes to the settlement. The tax office could start digesting the information now and just make the minor course corrections when the final comes about. That way they can be ready to publish something shortly thereafter.One would think that of the 1200 comments submitted to the court, this issue probably had more than its share of the total quantity. I'm not expecting any real changes in the final settlement, but it would be great if Judge Breyer at least acknowledged this issue in his conclusions and recommended that the various states consider some type of compensation. That might break the inertia somewhat and might lead to something positive. Of course, I'm just dreaming.
Because "tax" is an added cost. Its not part of the value of the car. And unless the "restitution" has been clearly defined to cover tax, title, license (it may, I haven't found anything on that yet) then it is an extra cost that should be compensated for. It will all boil down to the individual state laws and the legal decisions of the lawsuit itself.Why would the judge ask states to forego tax revenue to benefit customers who have already received the value of the car + "generous compensation?" ;-)
Fundamentally, in my view, because there are 50 states, and tax on vehicles is handled very differently from state to state, a few having no tax at all. It may well be that the compensation exists - at least in part - to take care of any tax issues. But to require VW to compensate each individual owner for tax paid, or all the accessories and add-ons some put on their cars (should I get additional money for my aftermarket floor mats?) just adds levels of complexity to an already involved situation.Why would the judge ask states to forego tax revenue to benefit customers who have already received the value of the car + "generous compensation?" ;-)
Well stated.Fundamentally, in my view, because there are 50 states, and tax on vehicles is handled very differently from state to state, a few having no tax at all. It may well be that the compensation exists - at least in part - to take care of any tax issues. But to require VW to compensate each individual owner for tax paid, or all the accessories and add-ons some put on their cars (should I get additional money for my aftermarket floor mats?) just adds levels of complexity to an already involved situation.
So I believe that the compensation amount is intended to cover this, and not (as some construe) to make up for some "injury" VW caused the owners. No such thing exists, VW broke the emissions statutes, period*, has admitted it, and the settlement flows from that.
*Please: no one bring up the issue of criminal charges against VW employees; that is an issue that is entirely separate from the topic under discussion.
While states as you say handle tax on car purchases quite differently, there are many that only tax on the difference between the purchase price and the trade in allowance. Since the buyback is based on the clean trade in value, why would those states not consider this as a trade in which would serve as an allowance against the purchase of a replacement within so many days of the buyback? Seems logical to me, but 'logic' and 'state governments' are generally mutually exclusive. And I have no dog in the fight. Haven't traded in a car since 1983.Fundamentally, in my view, because there are 50 states, and tax on vehicles is handled very differently from state to state, a few having no tax at all. It may well be that the compensation exists - at least in part - to take care of any tax issues. But to require VW to compensate each individual owner for tax paid, or all the accessories and add-ons some put on their cars (should I get additional money for my aftermarket floor mats?) just adds levels of complexity to an already involved situation.
So I believe that the compensation amount is intended to cover this, and not (as some construe) to make up for some "injury" VW caused the owners. No such thing exists, VW broke the emissions statutes, period*, has admitted it, and the settlement flows from that.
*Please: no one bring up the issue of criminal charges against VW employees; that is an issue that is entirely separate from the topic under discussion.
My post was not addressing why the states would or would not consider a buyback to be the same thing as a trade in (or, as some have theorized, a lemon law turn-in), only that, as with alcohol, say, states can vary quite significantly in their laws. This has always been the case, and is likely to continue.While states as you say handle tax on car purchases quite differently, there are many that only tax on the difference between the purchase price and the trade in allowance. Since the buyback is based on the clean trade in value, why would those states not consider this as a trade in which would serve as an allowance against the purchase of a replacement within so many days of the buyback. Seems logical to me, but 'logic' and 'state governments' are generally mutually exclusive. And I have no dog in the fight. Haven't traded in a car since 1983.
I am happy for you but others are not getting such a "generous" dealWell stated.
If the proposed settlement becomes the approved settlement I will be very generously compensated - actually over compensated.
There is no sane way to pretend that my second hand VW JSW with 114,000 miles is worth anywhere near the $14,300 in total compensation I expect to receive for it.
I've never purchased lottery tickets or gambled but selling my VW to VWoA for the figure I've seen must be similar to the feeling the clowns who tie up cashiers in convenience stores buying scratch off lottery tickets feel when they win.
I will leave the floor mats, cargo mat, recent new Michelins, and the recent new battery in the car and will probably run it through the automated car wash several more times before I drive it to the VW dealer in a month or several.
That's because you have to pay property tax on vehicles every year. And in the S.C. county I used to live in (Dorchester) it's 6% of the fair market value....every year. In Texas, its 6.25% one time sales tax.
OK, that's funny! Sarcasm. Unfortunately, zero tax payment is the best we can expect. No one is entitled to collect tax from the govenment!The taxing agency will cut you a rebate check.
You know how much these agencies love to return taxes.
Go back and read my post #35 in this thread. I'm not sure what you mean by "automotive specialist" but if you didn't talk to the auto sales refund office (yes there is such a thing) I would not believe what she said. In fact, there is a real possibility of getting some amount of a refund but it appears to be limited. There is an application process for that - but it would come under the lemon law justification. The question is whether this transaction can legally be considered part of the Lemon Law. IF it does, then you CAN get some of the tax back. HOWEVER, there is a 4 year time limit from the day you purchased the vehicle within which you must submit the paperwork to request the refund.Called the texas comptroller's office this morning, and got transferred to an automotive specialist.
She said that unless the buyback and replacement purchase are both a part of the same transaction, there will be no sales tax offset.
Hoping someone else comes up with something different...
Thats the big thing, I dont believe these cars are being considered "lemon's" by the definition which is usually defined as: 4 times in the shop for the same problem in the 1st year OR more than 30 days in the shop for the same problem, again, in the 1st year. I believe you could go 3 times in the first year and the 4th in the second year and still be covered.Go back and read my post #35 in this thread. I'm not sure what you mean by "automotive specialist" but if you didn't talk to the auto sales refund office (yes there is such a thing) I would not believe what she said. In fact, there is a real possibility of getting some amount of a refund but it appears to be limited. There is an application process for that - but it would come under the lemon law justification. The question is whether this transaction can legally be considered part of the Lemon Law. IF it does, then you CAN get some of the tax back. HOWEVER, there is a 4 year time limit from the day you purchased the vehicle within which you must submit the paperwork to request the refund.
Salsaman, thank you for this info. I called them and connected right through the vehicle sales tax refund office. A nice lady offered to start a claim process right away but said it would be up to the case reviewers weather or not I would get a refund. I would urge more texans in this forum to call them just to ensure they have visibility of what is coming and what to do when we submit our claims.I contacted the Texas State Comptroller's office today. The gentleman I spoke to in the vehicle sales tax refund office was very nice and said he knew about the TDI emissions lawsuit but didn't have a lot of details. I had to educate him on some of the finer points. but said the state tax attorneys and CPAs have not provided any guidance yet. He said this situation is unlike anything they have dealt with before but IF the transaction falls under the legal definition of Texas' Lemon Law buyback (i'm paraphrasing), at the time of the buyback transaction they would add tax, title, license costs in addition. This is based off of what he has seen with previous manufacturers buying back vehicles. This kind of tracks with something I read last night on the Comptroller's web site. However, I am thinking that if Lemon Law does not apply, then we Texans may be SOL. But I'm going to continue pounding the state on this for guidance. Probably would do better going to a tax lawyer.
The other interesting thing is that he said I was the first to call about this. I am thinking that if more Texas residents called, it would prompt the CPAs to provide guidance on this.
You can reach that office at 800-531-5441 ext 34545
Are you aware of the implications of this? Bringing "local and state law" into it would mean the decision would be delayed so that heirs would be the ones enjoying the buyback......<snip>
Seems fairly clear, getting it done would probably require lawyers though. The Judge should be aware of local and state law when writting his decision.
LOL In the county our car is registered, there's literally one person who does it all. No "auto sales refund office" in anderson county.Go back and read my post #35 in this thread. I'm not sure what you mean by "automotive specialist" but if you didn't talk to the auto sales refund office (yes there is such a thing) I would not believe what she said. In fact, there is a real possibility of getting some amount of a refund but it appears to be limited. There is an application process for that - but it would come under the lemon law justification. The question is whether this transaction can legally be considered part of the Lemon Law. IF it does, then you CAN get some of the tax back. HOWEVER, there is a 4 year time limit from the day you purchased the vehicle within which you must submit the paperwork to request the refund.
This is quite a large assumption. There is only one state that I have seen confirmed in posts on this forum that allows the buyback to be credited like a trade-in (VT, I think). Most, if not all other states consider this to be something completely different (which it really is), and you're going to pay sales tax on the full purchase price. I don't know which "Twin Cities" you live in, probably the ones in MN. The ones I live in (in IL) are subject to the IL sales tax statutes, which are pretty specific on this subject: no trade in allowance on the buyback.<snip> I had assumed that this would be a considered a trade in and I would only pay tax on the difference. <snip>
You have to pay the full sales tax.Any update on this topic now that we've had a few months of buybacks under our belts? I'm have a buyback appt on March 18, and my new GTI should arrive by the end of the month. I had assumed that this would be a considered a trade in and I would only pay tax on the difference. Like many of you, that could mean a $1K + tax bill depending on how things shake out. That may be just enough to push me towards another manufacturer......
I'd love to hear peoples experiences the past few months.
Cheers!