Quote:
Originally Posted by aerovette
I think you said what I said.
SPV - $24,700.00
Sales price - $23,000.00
Tax will be 6.25% of $24,700.00
Correct?
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No. In this case, the tax will be paid on $ 23,000, the actual sales price. You pay the tax on the actual sales price, unless the sales prices is LESS than 80% of the SPV, in which case, you're paying an artificial minimum of tax on 80%. You're paying over 80% of the SPV, so you pay tax on the actual purchase price. The only way the SPV would kick in is if you paid less than $ 19,760, in which case Texas would want tax on that (80%) even if you paid less than $ 19,760.
More unscrupulous people looking to skirt this law might pay 80% or less of the SPV for a car, and then buy the owner's manual, spare tire, or a t-shirt, as a separate transaction, for a separate price, in an unrelated sale. That's wrong, illegal, and totally unacceptable, by the way.