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Sales tax on private sale, how low can I go?

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mbshaw88 View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote mbshaw88 Quote  Post ReplyReply Direct Link To This Post Topic: Sales tax on private sale, how low can I go?
    Posted: September-22-2020 at 8:51am
If I buy a boat from a family member and get to write in whatever we want down for a Bill of Sale price, how low can I go without raising any red flags with state?

Specifically Illinois for an RUT-75 form:
"The tax rate is 6.25 percent of the purchase price or fair market value, whichever is greater."

How do they tell what fair market value is and how do they know it's not a damaged project boat?

This is all totally hypothetical by the way LOL
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Mpost View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Mpost Quote  Post ReplyReply Direct Link To This Post Posted: September-22-2020 at 8:56am
In Minnesota we don't have to pay sales tax on boats. But I know that on cars now they have a fair market value they use if your stated price is too low. If it is damaged or something else, they require a certified inspection/estimate to get a lower value. 
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TRBenj View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote TRBenj Quote  Post ReplyReply Direct Link To This Post Posted: September-22-2020 at 10:23am
Check and see if there is an inter-family sales tax exemption in your state- that is the case in many. You can transfer for $1.
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mbshaw88 View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote mbshaw88 Quote  Post ReplyReply Direct Link To This Post Posted: September-22-2020 at 10:35am
Originally posted by TRBenj TRBenj wrote:

Check and see if there is an inter-family sales tax exemption in your state- that is the case in many. You can transfer for $1.


You're correct, immediate family members are based only on purchase price.
Unfortunately this would be from my cousin :(
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Post Options Post Options   Thanks (1) Thanks(1)   Quote Morfoot Quote  Post ReplyReply Direct Link To This Post Posted: September-22-2020 at 12:28pm
Originally posted by mbshaw88 mbshaw88 wrote:

You're correct, immediate family members are based only on purchase price.
Unfortunately this would be from my cousin :(


Too bad you're in Illinois.. Heck down here in the south we marry our cousins so this deal would be legit! ;)
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Gary S View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Gary S Quote  Post ReplyReply Direct Link To This Post Posted: September-22-2020 at 12:42pm
Tim is right. Here in Illinois the state sets the value no matter what your bill of sale says you paid. Just wait till you go to the dmv to get this sorted out- after standing in line 3-4 hours you'll pay just to get out of there and you'll be happy.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote 8122pbrainard Quote  Post ReplyReply Direct Link To This Post Posted: September-22-2020 at 1:09pm
And with the financial situation Illinois is in, I'm sure they won't give you a break in the value. Cry


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Post Options Post Options   Thanks (0) Thanks(0)   Quote tryathlete Quote  Post ReplyReply Direct Link To This Post Posted: January-13-2021 at 5:31pm
Gary, I’ve used my creative local currency exchange to get titles and such and they provide creative guidance worth thousands (that translates into hundreds 😉 😉).

With only being on my third boat it hasn’t created much free cash, but anything is better than giving it to the corrupt state of IL. Our wicked witch melted today as Mike Madigan is finally out of power, so there’s a flash of hope in a sea of misery.
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