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Discussion Starter #1 (Edited)
Tax Question: Answered it by calling around..

Ok, here is the question:

I am in the process of buying a E in Indiana. But I am going to be registering it in Ohio.

My question is: do I have to pay ohio tax on the car or indiana tax on the car b/c that's where the car was sold?

I've read that the you generally pay the difference; however, sales tax in ohio is 5.5% while the indiana one is 7%. so do i have the dealer keep the sales tax off the car in indiana in order to register/pay for the tax in ohio?

Thanks,

Bart
 

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Note sure about those states...but in every case where I've purchased an out of state vehicle I've always payed tax to my home state (usually during the registration/title process.)
 

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Discussion Starter #3 (Edited)
i called the dealer and spoke with the business manager on the subject.

basically he stated that the states surrounding indiana are "reciprocating" states, and i will be given a form showing that i have paid on the sales tax. if i paid more than the area i'm registering it in, i lose that $$, if its less, i pay money.

who knew what PIA this was going to be:lol:
 

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I bought in AZ and live in Cal. If I would have picked it up it would have cost me $300 in local taxes so I had it shipped to me and I went and paid the taxes and reg for Cal only. Have a Az DOT title and a Cal Reg.
 

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Discussion Starter #6
yeah, i learned all about the state laws in this process.

called the tax department of ohio to get this all figured out. my head was swimming :lol:
 

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You might want to check with your states DMV. I'm sure they will have the info you need.
 

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It may make a difference on whether you are financing or not . . .

My last out of state purchase I was told the dealership was not permitted to charge me any tax if I was paying in cash; I would be responsible for paying taxes to my state when I registered the vehicle. I ended up deciding to finance a portion so I paid my state's percentage tax in the deal (which just happened to be different from the state I was purchasing in).

Then again, I imagine each state has different regulations so making sure you have the information correctly from your DMV will prevent unexpected hassles and possibly overpayment of taxes owed.

Good luck!
 

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Discussion Starter #10
since i've gone thru the process i can now answer my own questions:

the traditional tax process is that you pay the taxes on the car in the state/county you are registering in, regardless of where you buy it.

however, some states have developed a "reciprocating" policy towards taxes, ohio and indiana carry that policy towards each other.

what does that mean?

when buy a car in indiana, you will have to pay indiana tax (7%) at time of purchase. you will receive a affidavit proving that you indeed payed taxes on the car.

now, when you take your information to register the car in your county(ohio, 6.5% county tax for me). you will take the affidavit with you. the rub here is as follows:

if the state tax in the state you are registering is is GREATER than one one you bought in in -- you have to pay that additional % different.

if the state tax in the state you are registering is is LESS than one one you bought in in -- you will get a "credit" to use towards the registration of the vehicle.

(i called up the ohio tax department to confirm this whole "reciprocating" law, so it wasn't just the dealer pulling my leg)

the lesson from all this: just buy a car in state, its much easier! :lol:
 
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