Correct. State sales and use taxes are codified, generally, on the actual sale price of the vehicle. I’d encourage you to know the law and administrative code your state vehicle registrars use BEFORE you sign.
If you buy private party and obtain a bill of sale, the tax is on the actual sale price. Pay attention here, you may need a notarized receipt.
I got into an all day long fight with the MD MVA branch chief in Waldorf, circa 1992 or 1993 on my first Mustang, bought used for around 6400 bucks or so, which was substantially under KBB. MD admin wanted full KBB because it was 1200 higher and I said F*** you, here’s my receipt, I didn’t pay that.
Oh, but Mr. Smurfslayer, MD requires a notarized receipt for anything under kbb value.
“Cite to authority, please”. followed by perplexed looks, so I followed up with “show me in the state code or state regulations, your authority to charge me more than the receipt, and/or your authority to require documentation above what the courts require”. This poor woman was absolutely stymied. They wanted me to move out of line, and I refused - “I have business with MVA, have the required documentation and the funds to complete the transaction”. They called a charles co. deputy, and he backed me, so they could not service another person until I was done -- So they got someone else at the counter.
I made them produce the code book - this is pre pdf days, pre strong internet search, etc. So they brought out 2 volumes of MVA regulations, rules and policies that were easily Webster’s unabridged sized. I made the branch chief pour through that manual to find the relevant authority. It took her 30 minutes to try and bargain out of it and I offered “I’ve taken the whole day off, and you’re not charging me another $200 in taxes”. Back to the books. About mid afternoon, she found it, and the text was an MVA “policy”, not a state regulation or law and they lacked authority to enforce it. I demanded they process the registration & tax at my receipt’s price, eventually she relented.
I knew the state law at the time, but I was sketchy on administrative code. I knew they couldn’t legally enforce agency ‘policy’ on me though through probably 10 years of encounters with MD MVA, all of which were negative. I got fed up with being abused by them and came prepared. Yes, it cost me an entire day off, which was at best a break even affair for saving $200 but I didn’t make much at the time and that money was important to me.
If your ‘sales price’ of the vehicle includes the ADM, it’s taxable.
