Short blog posts, journal entries, and random thoughts. Topics include a mix of personal and the world at large. 

Why are used car sales taxed?

It’s occurred to me that California charges sales tax on used car sales, and it makes absolutely no sense. I understand if a dealership is selling the used car, but why must I pay tax even if its from a private party? Surely I don’t have to pay the State anything if I were to purchase a flat-screen television sold by some dude on Craigslist who’ve probably stole it. 

Maybe we are obligated to report and pay sales taxes on those sort of purchases and it's just that nobody does it and it isn't at all enforced. We are however forced to do so for cars because each motor vehicle is required to be properly registered with the localities, ergo the government knows everything. 

Well, that really sucks, because the State is essentially double (or triple) taxing a product. Hasn’t a merchandise done it’s duty to society already (in form of the sales tax) when it was first sold? I think it should be illegal for government to double-dip on this, and yes it’s mainly because I don’t want to pay. My next car will likely be used and priced into the six-figures so the tax bill - especially when registered in San Francisco - is going to be enormous. 

I understand the other side of the coin: by instituting sales tax on used cars, not only does California reap the revenue benefits but it also prevents auto dealerships from titling their inventor (thus converting new cars into used) thereby lowering the out-the-door price for customers. Imagine the adverts of “pay no sales tax” plastered in front of dealer lots next to the giant inflatable figures.

Perhaps I'm in a truly small minority: people that care about taxes during car shopping. I bet the majority of consumers simply look at the sale price and regard taxes and license fees as something insignificantly tacked on afterwards. You can afford to do this in Oregon where there is no sales tax, but for me living in San Francisco the final tax bill when buying a car is nearly 10 percent of purchase price. 

10 percent of $100,000 is $10,000, and that’s all going to the State on a car they’ve already taxed at least once. I consider that to be thievery in the highest contemporary order. 

Follow the light. Climb! 

Follow the light. Climb!