DC DMV - Fair Market Value for a car and taxed by DC?

[Anonymous]

'm really not sure where to post this question. Sorry. I posted this in the OFF Topic thread and they suggested I post here.

I recently bought a car from BMW Financial Services. My total payment was $35,000 and change (I know, first world problems).

When I went to the DC DMV to change title, tags etc...They charged me an "excise" tax based on rates applied to the fair market value of my car (as defined by the current National Automobile Dealers Association (NADA).

I purchased my car from BMW financial for $35,000. I have a notarized bill of sale from BMW Financial Services. When I went to the DMV, they claimed my car was worth $45,000 and charged me an excise tax of roughly $4000 and change at a 9% rate on the cars value. That is about a $1000 upcharge in taxes paid to DC based on the purchase price of the car. How is this allowed?

Any advice would be welcome. Is there a way to appeal this charge?

[Anonymous]

Anonymous wrote:'m really not sure where to post this question. Sorry. I posted this in the OFF Topic thread and they suggested I post here.

I recently bought a car from BMW Financial Services. My total payment was $35,000 and change (I know, first world problems).

When I went to the DC DMV to change title, tags etc...They charged me an "excise" tax based on rates applied to the fair market value of my car (as defined by the current National Automobile Dealers Association (NADA).

I purchased my car from BMW financial for $35,000. I have a notarized bill of sale from BMW Financial Services. When I went to the DMV, they claimed my car was worth $45,000 and charged me an excise tax of roughly $4000 and change at a 9% rate on the cars value. That is about a $1000 upcharge in taxes paid to DC based on the purchase price of the car. How is this allowed?

Any advice would be welcome. Is there a way to appeal this charge?

That’s how DC calculates the taxes, there is no appeal. Sounds like you got a good deal on the purchase price. The alternative is move to another state like Virginia where you pay sales tax on the purchase and a personal property tax each year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:'m really not sure where to post this question. Sorry. I posted this in the OFF Topic thread and they suggested I post here.

I recently bought a car from BMW Financial Services. My total payment was $35,000 and change (I know, first world problems).

When I went to the DC DMV to change title, tags etc...They charged me an "excise" tax based on rates applied to the fair market value of my car (as defined by the current National Automobile Dealers Association (NADA).

I purchased my car from BMW financial for $35,000. I have a notarized bill of sale from BMW Financial Services. When I went to the DMV, they claimed my car was worth $45,000 and charged me an excise tax of roughly $4000 and change at a 9% rate on the cars value. That is about a $1000 upcharge in taxes paid to DC based on the purchase price of the car. How is this allowed?

Any advice would be welcome. Is there a way to appeal this charge?

That’s how DC calculates the taxes, there is no appeal. Sounds like you got a good deal on the purchase price. The alternative is move to another state like Virginia where you pay sales tax on the purchase and a personal property tax each year.

I would get an estimate from on a respected neutral party and if the difference is big, it should be able to be appealed

[Anonymous]

I had this happen when I bought a used Vespa a long time ago in DC. Paid $2K for it with a bill of sale and DC DMV said it was worth $2.4K per their database.

Basically, you're screwed. They do this to avoid less-than-arms-length deals between friends and family to transfer a vehicle.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:'m really not sure where to post this question. Sorry. I posted this in the OFF Topic thread and they suggested I post here.

I recently bought a car from BMW Financial Services. My total payment was $35,000 and change (I know, first world problems).

When I went to the DC DMV to change title, tags etc...They charged me an "excise" tax based on rates applied to the fair market value of my car (as defined by the current National Automobile Dealers Association (NADA).

I purchased my car from BMW financial for $35,000. I have a notarized bill of sale from BMW Financial Services. When I went to the DMV, they claimed my car was worth $45,000 and charged me an excise tax of roughly $4000 and change at a 9% rate on the cars value. That is about a $1000 upcharge in taxes paid to DC based on the purchase price of the car. How is this allowed?

Any advice would be welcome. Is there a way to appeal this charge?

That’s how DC calculates the taxes, there is no appeal. Sounds like you got a good deal on the purchase price. The alternative is move to another state like Virginia where you pay sales tax on the purchase and a personal property tax each year.

I would get an estimate from on a respected neutral party and if the difference is big, it should be able to be appealed

I have been looking into this situation for a couple days. Apparently, there is no appeal process. It's just the point of the whole thing. If BMW Financial Services NA sold my car to me at a certain price (notarized bill of sale from one of the most respected auto dealers in the US) , do you think they are doing me a favor? BMW would not sell me a car for $35K if the value is $42K. Yet DC appraises my car value (using their monthly subscription to the NADA) more than $10K at fair market value and charges me excise tax based on the NADA country average price? This seems crazy to me.

[Anonymous]

Same thing happened to me except the car I purchased was salvaged with a rebuilt title. No way it has the same FMV as the same car with a clean title.

[Anonymous]

Anonymous wrote:'m really not sure where to post this question. Sorry. I posted this in the OFF Topic thread and they suggested I post here.

I recently bought a car from BMW Financial Services. My total payment was $35,000 and change (I know, first world problems).

When I went to the DC DMV to change title, tags etc...They charged me an "excise" tax based on rates applied to the fair market value of my car (as defined by the current National Automobile Dealers Association (NADA).

I purchased my car from BMW financial for $35,000. I have a notarized bill of sale from BMW Financial Services. When I went to the DMV, they claimed my car was worth $45,000 and charged me an excise tax of roughly $4000 and change at a 9% rate on the cars value. That is about a $1000 upcharge in taxes paid to DC based on the purchase price of the car. How is this allowed?

Any advice would be welcome. Is there a way to appeal this charge?

Same thing happened to me years ago. I bought a new car with a credit of some sort- cash back or dealer credit? But I would not have bought it without the credit and the FMV was absolutely the price without the credit. The guy looked at it said "well this is the higher number that is used to be worth so that is what you pay taxes on." No it did not make sense and yes DC is ridiculous for computing it like that.