I live in Ohio. If I buy a used car, the purchase amount written on the title/transfer is the amount that I pay sales tax on. That sales tax rate varies by county of residence but as an example, my county would require 6.75%
In other places, the state assigns a value to the car regardless of what the purchase price was. So, if you buy the car for a low $2k the tax is the same as if you buy the car for a higher $8k.
How is it in Michigan for Michigan residents who buy a car?
Are you selling to a Michigan resident or buying from one? If buying from one, you get taxed here the same as if the seller were in ohio.
In Michigan we would pay 6% sales tax, regardless of where we live in the state.
You pay sales tax to the state that it's registered in. Like I just got a car in California and I live in Colorado. I paid my sales tax to colorado when I registered the car and not california when I bought it.
DeadSkunk (Warren) said:In Michigan we would pay 6% sales tax, regardless of where we live in the state.
Yep. Even on used cars, where someone already paid sales tax on it. And that's about as much as I want to say because I hear Margie's cement mixer warming up... 
MI resident pays 6% on "bill of sale" price when the car is over 10 years old (IIRC it's 10 years, but there's definitely a cutoff). if newer than whatever that cutoff is, then it's 6% on some reference price used by the secretary of state. probably KBB or some variant thereof.
AngryCorvair (Forum Supporter) said:MI resident pays 6% on "bill of sale" price when the car is over 10 years old (IIRC it's 10 years, but there's definitely a cutoff). if newer than whatever that cutoff is, then it's 6% on some reference price used by the secretary of state. probably KBB or some variant thereof.
That's the first I've heard of anything like that and had to look it up. From the way it's worded on the SOS website, they're supposed to take 6% from whatever is higher between the stated sale price or a "fair market value", but no mention of any specific year cut off. However it sounds like they take 6% from the sale price at the time of transfer, and then it's up to the Treasury Department to determine what is higher and then collect and possibly penalize the purchaser for the difference:
Although the Secretary of State collects 6% tax when the title is transferred, final determination of the tax owed on vehicle transfers is made by the Michigan Department of Treasury. The tax rate is 6% of the purchase price or the retail value at the time of transfer, whichever is greater.
If Treasury's determination of tax liability differs from the amount collected when the title was transferred, the purchaser must pay the difference plus interest and possible penalty.
Found a 5 year old article about the whole thing too: https://www.crainsdetroit.com/article/20150120/NEWS01/150129984/audit-michigan-may-be-losing-taxes-in-used-vehicle-sales
Secretary of State spokesman Fred Woodhams said it's up to Michigan's tax agency, the Treasury Department, to later determine if a sales price or value doesn't appear reasonable.
"We don't inspect the vehicle for damage or how the mechanical parts are operating," Woodhams said. "It doesn't make sense for staff at the counter to ascertain the value. We accept the sale price as reported."
Spokesman Terry Stanton said he's barred by law from disclosing how often the Treasury Department challenges a used car deal. He said the department relies on the Secretary of State to flag a sale that looks fishy.
"We do not have staff whose sole responsibility is checking this documentation. ... We are working with (the Secretary of State) to develop a process that would better ensure appropriate collection of use tax on such sales," Stanton said.
I'm guessing they probably still operate that way? I know lots of guys here in MI that are habitual title sale price liars and/or buy broken cars of varying ages (IE one who buys/fixes/flips abused newish Subaru's off the top of my head) and have never heard of anyone knowingly running into this.
I had a conversation with the lady behind the counter at the SOS the last time I did a title transfer that started with her questioning my low sale price. Then she said nevermind because she initially thought the fee number on the title was for cars with an MSRP well over $100k. She then basically told me they really only look for super egregious low numbers in relation to the age of the vehicle and/or that fee number. I think she told me they're far more concerned about people frauding the tax exemption for transfers between family members (which IIRC is a new thing within the last decade) than they are people being dishonest with the sale price.
shelbyz said:I think she told me they're far more concerned about people frauding the tax exemption for transfers between family members (which IIRC is a new thing within the last decade) than they are people being dishonest with the sale price.
It's older than that. We bought a truck from my FIL in 2008 and put it in my wife's name. Since he was technically selling it to his daughter, it only cost us $1.
Tom_Spangler (Forum Supporter) said:DeadSkunk (Warren) said:In Michigan we would pay 6% sales tax, regardless of where we live in the state.
Yep. Even on used cars, where someone already paid sales tax on it. And that's about as much as I want to say because I hear Margie's cement mixer warming up...
Meh. I pay sales tax on used parts, used books, used DVDs and CDs, used computers, used furniture... It's a sales tax, not a released unto the world tax.
Tom_Spangler (Forum Supporter) said:shelbyz said:I think she told me they're far more concerned about people frauding the tax exemption for transfers between family members (which IIRC is a new thing within the last decade) than they are people being dishonest with the sale price.It's older than that. We bought a truck from my FIL in 2008 and put it in my wife's name. Since he was technically selling it to his daughter, it only cost us $1.
I got swindled then. Lol jk. My first car was initially legally owned by my Mom. Sometime in 2011, I went to transfer the title to my name and left the sale price empty. Explained this to the lady at the SOS, and she said something had to go in there and made it some low amount. Then I bought a car from my sister in 2016, explained this at the SOS and they gave me some form that had to be filled out explaining the relationship and they acted like it was some new thing. Perhaps it was just the form then that was new?
but before you leave with the car back to ohio, you gotta pay the "ohio sucks" tax here in Michigan and that will be a case of Yuengling delivered to my door, thanks.
48328
In reply to fidelity101 (Forum Supporter) :
That Pennsylvania swill?
The funnest part about the first time I bought a car from Michigan was getting the title notarized when I bought it. You need that in Ohio, so when I went up to get the car, we went to a local bank and got the title notarized. Little did I know that the purchaser state goes by the purchasee state rules. The Clerk of Courts herself handled my title for that car, and she said "Oh hon, you didn't have to do that" 
canoe
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