If you sell a car privately, how does sales tax work in Washington?

 

The state collects it at title transfer. It doesn't matter what state you buy it from, when it is first titled or the title is transferred in WA, they get a cut.

-Jim

 

[QUOTE]Originally posted by JHill
[B]The state collects it at title transfer.

 

The only thing the seller needs to do is fill out the vehicle sellers report of sale and mail it in to the DOL within 5 days after the sale. It includes the agreed upon price on the form, which is also written down on the title. This is the basis for the tax when the buyer takes it in to get the transfer done.

All of this information is on the title too, which in most cases is held by the lender. Some lenders make it very easy to sell private party, and some not. BECU seems to be one of the best to work with.

-Jim

 

Ok, thanks for the info. This is the way I had proceeded in the past with two cars that I sold privately. What confused me was first, a discussion on another forum which made it sound as if the seller was paying some sort of tax and second, the salesman when I bought my S2K. I had another car at the time that I decided to sell privately because I did not feel the trade-in was good enough. He mentioned that I wouldn't have to worry about tax if I traded it in. Not sure what he meant by that for me as the seller either. As you mentioned, I just filled out the paperwork and mailed it in within the 5 day period.

 

... the salesman was right on the Tax being an advantage on the trade-in but his explanation was a little screwed up (probably didn't understand it himself). The advantage is the fact that you only have to pay Tax on the balance owed for the new car and the trade-in is used to reduce that balance. i.e. if they offer you $10,000 trade-in on your old car it actually worth more like $10,800 (depending on the current Tax rate) to you since the Tax liability on the new car is reduced by $10,000 (you have about $800 less Tax to pay on the new car). Know what I mean?

 

[QUOTE]Originally posted by RT
[B]... the salesman was right on the Tax being an advantage on the trade-in but his explanation was a little screwed up (probably didn't understand it himself).

 

This link may help spell out the specific details:

http://www.dol.wa.gov/vs/sale.htm

 

.... just for a data point, I've sold/traded-in at least 15 Titled things (and some with missing Titles too ) in the past 20 years and have never bothered to fill one of those bad boys out ....... not saying you shouldn't (but who's got time to fu<k w/ it), just letting you know the sky ain't going to fall in or noth'n either

 

Thanks for the link, Jerry. I filled out the paperwork that was with the title and mailed that in. I never went into the licensing office nor did I have to pay any filing fee. I figured that is way everyone would do (why take the time to go into the licensing office?).

My guess is that 99.9% of the time no one is any the wiser about you sending this report in. Most people transfer the title as normal. However, if someone did commit a crime before hand, than this filing might make life a tad easier. We usually fill it out with the buyer as it takes about 2 minutes. Well worth it even if you'll probably never need to worry about it.