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On the other side of the fence, if sales tax weren't collected on used cars, guess what everyone would probably buy?
What Uncle Sam are you talking about? There is no federal sales tax on used cars.
Sales Tax on Used Cars
Play it Again Sports also must charge sales tax on the used equipment it sells.
As do pawn shops and second hand stores.
The recent sale of a Corvette I owned got me thinking about the repeated sales tax for used automobiles that change ownership title.
The Carfax report showed the car as having 4 owners, including myself. The fifth owner is the guy that bought the car from me.
When that car was new, some poor bastard bought the thing for $52k and paid sales tax of about $4500.
Fast forward a couple years and the first owner sold the car to the second owner for $40k, $3500 in sales tax.
The car was later sold to the third owner for $30k, $2700 in sales tax
I bought the car for $17k and flushed $1500 down the toilet.
The fifth owner bought it from me for $20k, and presumably gave away $1800 as taxes.
Maybe I’m missing something but this comes across as a taxation travesty. How have we come to accept that this is ok?
I mean full sales tax was collected on the car when it was brand new. And every time the car changes hands, the government takes their commission. I see no logic on this.
I admit there are some things in our tax code that are tragic, but this is one that I’ve never been able to wrap my head around.
Any comments?