Buying a car in PA as a MD resident

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  • Sig Fan

    Member
    Feb 15, 2011
    93
    PRMD
    I'm headed up to Lancaster to most likely, buy a used car on Saturday. The main question I have is about sales tax.

    So in MD, as well as in PA, if you trade in a car to the same dealer you purchase a car from, you only pay sales tax on the difference, which could be a nice discount. Example - buying a 20K car with a 12K trade, you only pay tax on 8K, not the full 20K. That would save $720 on that example.

    OK, so when I buy a car in PA as an MD resident, what sales tax am I paying? From what I can find on the interwebs, the PA dealer would most likely not charge me any tax because I am an out of state resident, and then I would pay the 6% when titling in MD the car based on the bill of sale. SO, does that mean I'm getting screwed $720 because they will tax me on the 20K, not the 8K? Should I not trade the car in to a PA dealership?
     

    Tomcat

    Formerly Known As HITWTOM
    May 7, 2012
    5,568
    St.Mary's County
    IIRC there's something in the Maryland law that deals with Blue Book value or something to that effect. In other words you can't say you only paid $500 for a $20,000 car. Same thing here, you're probably going to get stuck with the tax on the true value.
     

    mdram

    Banned
    BANNED!!!
    Nov 2, 2011
    2,014
    Eastern Shore of Maryland
    A notarized MVA Bill of Sale is needed if the sale price is less than the vehicle’s book value and the vehicle is 7 years old or newer. Please call the MVA’s Customer Service Center at 1-410-768-7000 to verify the vehicle’s book value.
    If a notarized “Bill of Sale” is not presented and the purchase price of the vehicle is within $500 of the retail value as shown in the National Publication of Used Car Values, MVA will accept the purchase price as completed on the title.
    An excise tax will be charged on the basis of 6% of the vehicle’s book value or 6% of the purchase price on the notarized “Bill of Sale” for vehicles 7 years old or newer. For older vehicles, the tax is calculated on the purchase price. Maryland’s minimum excise tax charged is $38.40, based on a minimum value of $640.
     

    Sig Fan

    Member
    Feb 15, 2011
    93
    PRMD
    Blue Book value only comes into play if you don't have a bill of sale, which I will as I'm buying from a dealership.

    mdram - MVA website does not answer my question about out of state sales tax. I guess I should just call the dealership in PA and ask how they would do it - if the bill of sale will say 20K or 8K.
     

    shootin the breeze

    Missed it by that much
    Dec 22, 2012
    3,878
    Highland
    When I was active duty and stationed at Fort Bragg as a MD resident, I bought a new car. I paid NC tax of 3%. When I moved back to MD I had to pay an additional 3% to make MD's 6% tax.

    If the dealer charges you PA tax (they can and should actually I think) then you will pay the full amount on the percentage you have to pay to make 6%.

    Another scenario. I bought an S2000 (I miss that car so much) from a VA dealer while a MD resident. They sent the registration to the MVA and it was registered from the get go in MD. That may be an option for you.
     

    LoneRanger

    Banned
    BANNED!!!
    Dec 22, 2009
    4,759
    My son has bought 2 vehicles in Pennsylvania

    As a Maryland resident all the Pennsylvania dealer should be charging you is the small fee for the Pennsylvania 30 day transport tag.

    You will still need to get the car Maryland inspected and will pay Maryland sales tax on the amount stated on the bill of sale.

    Depending on the age of the car (I think it is 7 years) the folks at the MVA still have the discretion to decline the bill of sale amount and charge sales tax on the book value of the vehicle.
     

    DC-W

    Ultimate Member
    Patriot Picket
    Jan 23, 2013
    25,290
    ️‍
    My son has bought 2 vehicles in Pennsylvania

    As a Maryland resident all the Pennsylvania dealer should be charging you is the small fee for the Pennsylvania 30 day transport tag.

    You will still need to get the car Maryland inspected and will pay Maryland sales tax on the amount stated on the bill of sale.

    Depending on the age of the car (I think it is 7 years) the folks at the MVA still have the discretion to decline the bill of sale amount and charge sales tax on the book value of the vehicle.

    THIS

    I bought my Suzuki in NY -- went through the same process. My dealer cut a check (which got included in my financing anyways) to take care of registration, tax, and title back in MD.
     

    Boom Boom

    Hold my beer. Watch this.
    Jul 16, 2010
    16,834
    Carroll
    My son has bought 2 vehicles in Pennsylvania

    As a Maryland resident all the Pennsylvania dealer should be charging you is the small fee for the Pennsylvania 30 day transport tag.

    You will still need to get the car Maryland inspected and will pay Maryland sales tax on the amount stated on the bill of sale.

    Depending on the age of the car (I think it is 7 years) the folks at the MVA still have the discretion to decline the bill of sale amount and charge sales tax on the book value of the vehicle.

    /THREAD

    The only exception is when the out-of-state dealer registers the vehicle at MVA for you as a value-added service. In such a case, you pay the 6% excise tax at the time of sale.
     

    Sig Fan

    Member
    Feb 15, 2011
    93
    PRMD
    I spoke with the dealer. They will not charge me sales tax if I am a MD resident. Also, the bill of sale will show a 20K sale with a 12K trade, so a net sale price of 8K. That is what I should be taxed on @ 6% when I register the car back in MD.

    I should have just called them in the first place but at least I got you all thinking....
     

    PapiBarcelona

    Ultimate Member
    Jan 1, 2011
    7,342
    One PA dealer gave me the option of not financing the sales tax, and I'll pay the sales tax in MD myself out of my own pocket, or they include sales tax in the financing and write me a 6% check. Another PA dealer said they have to include sales tax and would write me a check for 6%. Regardless, you're paying taxes in MD once you register it with the MD MVA you just wont be literally paying 6% twice one way or another.

    Don't forget the $80 for a MD Inspector to find something wrong with it when you bring it back.
     

    Michael S

    Active Member
    Nov 6, 2012
    416
    Towson
    Just bought a used truck in VA. prices seem to be better out of metro area. The taxes are paid when the vehicle has its tag and title work done. If you buy the car there they will give temp tag, When the tag and title work is done ( either them or you ) That is when the Maryland tax is paid. Most dealers will let you pay that however you want.
     

    montoya32

    Ultimate Member
    Patriot Picket
    Jun 16, 2010
    11,311
    Harford Co
    I'm headed up to Lancaster to most likely, buy a used car on Saturday. The main question I have is about sales tax.

    So in MD, as well as in PA, if you trade in a car to the same dealer you purchase a car from, you only pay sales tax on the difference, which could be a nice discount. Example - buying a 20K car with a 12K trade, you only pay tax on 8K, not the full 20K. That would save $720 on that example.

    OK, so when I buy a car in PA as an MD resident, what sales tax am I paying? From what I can find on the interwebs, the PA dealer would most likely not charge me any tax because I am an out of state resident, and then I would pay the 6% when titling in MD the car based on the bill of sale. SO, does that mean I'm getting screwed $720 because they will tax me on the 20K, not the 8K? Should I not trade the car in to a PA dealership?

    Works the same way. The dealership in PA should only collect the tax on the difference to send it to the MVA. I purchased a vehicle in VA this past May and I had to remind them that they were to only collect tax on the difference.
     

    Blaster229

    God loves you, I don't.
    MDS Supporter
    Sep 14, 2010
    46,407
    Glen Burnie
    For some reason, I thought the whole, "pay tax on only the trade difference" was for new cars only and not used. Not sure why I'm thinking this. I'm probably wrong.
     

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