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Sales tax on private sale, how low can I go? |
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mbshaw88 
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Joined: April-28-2013 Location: Chicago Status: Offline Points: 244 |
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 Topic: Sales tax on private sale, how low can I go?Posted: September-22-2020 at 8:51am |
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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
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Mpost
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Joined: July-05-2018 Location: Monticello, MN Status: Offline Points: 215 |
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Posted: September-22-2020 at 8:56am |
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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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84 SN Sold 98 SN Lund Pro V 1975 Alumacraft
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TRBenj
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Joined: June-29-2005 Location: NWCT Status: Offline Points: 20712 |
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Posted: September-22-2020 at 10:23am |
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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
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Joined: April-28-2013 Location: Chicago Status: Offline Points: 244 |
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Posted: September-22-2020 at 10:35am |
You're correct, immediate family members are based only on purchase price. Unfortunately this would be from my cousin :(
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Morfoot
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Joined: February-06-2004 Location: Cumming, GA Status: Offline Points: 5023 |
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Posted: September-22-2020 at 12:28pm |
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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"Morfoot...He can ski. He can wakeboard. He can cook chicken. He can create his own self-named beverage. And..can also apparently fly. A man of many talents."
72 Mustang "Kermit", 88 SN Miss Scarlett |
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Gary S
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Joined: November-30-2006 Location: Illinois Status: Offline Points: 13265 |
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Posted: September-22-2020 at 12:42pm |
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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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8122pbrainard
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Joined: September-14-2006 Location: Three Lakes Wi. Status: Online Points: 40242 |
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Posted: September-22-2020 at 1:09pm |
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And with the financial situation Illinois is in, I'm sure they won't give you a break in the value.
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tryathlete
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Joined: April-19-2013 Location: Lake Villa, IL Status: Offline Points: 1705 |
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Posted: January-13-2021 at 5:31pm |
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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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TRBenj wrote: