SACRAMENTO >> The Department of Motor Vehicle (DMV) may have charged some people too much use tax on your purchase of a car from a private resident.
When purchasing a car from a private party, the buyer is required to register the vehicle with the DMV, and pay the use tax. The use tax a buyer should generally pay is the applicable sales tax rate for the area where the vehicle will be registered (usually the new owner”s home or business address).
The DMV, working with the Board of Equalization (BOE), has discovered that some taxpayers may have been charged the wrong rate in computing their tax liability on the purchase of a vehicle from a private party.
For example, if a person bought a used car for $10,000 and the car will be registered to the buyer”s home address in the city of Inglewood, the person would owe $950 in tax, based upon Inglewood”s sales and use tax rate of 9.5 percent. If the home was nearby in the unincorporated area of Los Angeles County, which is also in the 90045 zip code, the person would owe $900, based on that area”s rate of 9 percent.
The BOE, working with the DMV, is in the process of implementing safeguards to protect California taxpayers from being over-charged in the future. However, Chairman Jerome E. Horton encourages taxpayers to report any concerns to the BOE.
“Taxpayers have the right to pay the correct amount of taxes under the law, and correcting this mechanical or human error preserves that right,” Horton said.
To verify that a person was charged the correct amount of tax, and to file a claim for refund if the wrong amount was collected by the DMV, visit www.boe.ca.gov.
The request for a refund must be made in writing, and must state the grounds or specific reason for the over-payment. You may use the form BOE-101. More information and instructions are available on the BOE”s website in Publication 117.
If a buyer was overcharged tax by a registered vehicle dealer, he or she should request a refund from that dealer. For further assistance, consumers may contact the BOE”s Customer Service Center at 1-800-400-7115.
