Bruck

My S4 is in the name of my father's Company. This is for insurance reasons for the most part. The time has come for me to make it "mine" as I have moved from NJ (where the company is) to NC. I have talked to the NC dmv today, so I am well aware of the costs associated with registering a car in NC in this circumstance. My question pertains to the sales tax my Dad says we have to pay.

Basically here is what I am going to do.

step 1) Dad signs title over to me
step 2) I get NC insurance
step 3) I take title and insurance to NCDMV
step 4) I pay a bunch of fees including a highway usage tax (that has no cap because the car was not previously registered to me in NJ) so the total of that tax is (656 dollars estimate)

Do I have one more fee coming to me in the form of sales tax? I am aware of the yearly property car tax in NC. This is not what I am referring to.

BaysideRS4

you don't get charged sales tax to get the car registered, you just need a good title. They may need a bill of sale in order to transfer the title from the Company to you. My point is there isn't a step in the process where you're required to pony up for sales and use taxes.

If there's no consideration (i.e., you're not paying the Company) then there's nothing to tax. The chances of the sales and use tax audit division of the state revenue department finding out that you received the car for little or no consideration and imputing some kind of fair value to charge sales tax is very small.

He might be being cautious since the seller (his company) would have the responsiblity of collecting the tax if a tax was due. However, on the very off chance he gets an inquiry about it, then he simply pays the tax with interest that he would have otherwise paid in the first place. He could get out of any penalties by writing a letter.

If he's really worried about it, then draw up a bill of sale for the valuable consideration of $1 US dollar. Then I wouldn't send in the $.07 to draw attention to you.

Are you an employee of this company? If so then everything I said is out the window.

0!1qu!ckAvant!

I believe you do and your cars value is at a set amount in NC & taxed accordingly.

BaysideRS4

are you talking about some kind of ad valorem car tax?

Bruck

I am not and never have been an employee

BaysideRS4

on the value of the car.

If you could convince him, then I'd do what you need to do the get the title transferred (probably bill of sale and if so use $1 or very low amount) and not worry with the sales and use tax.

Worse case a sales and use auditor comes to his company for other reasons (routine audit of sales and purchases) and what is the likelihood they are going to want information on a disposed asset? sales and use auditors focus on the company's payables for use tax accrual and sales for sales tax collection, not on disposed assets to see if sales tax was collected. If it's a vehicle they're going to assume (if they even give it a thought) that the car was traded in or sold to a dealer, who is a reseller meaning no sales tax was required to be withheld.

I say forget about it. Chance of there being a problem is low and the cost of paying the tax is high.

0!1qu!ckAvant!

being paid . And if I'm not mistaken the DMV will collect the tax in NC at the time of registration. Just check the NC DMV website. Should be answered there.

Bruck

I just got off the phone with them, they only mentioned the fees that I listed in my first post of this topic