Use Tax on vehicles purchased.

I know when you read this you are going to scratch your head and say can this be true, well sadly it is.

These are actual example of the purchases of vehicles in North Carolina and the amount of sales/use tax paid.  Vehicles are taxed on the "sale" price of vehicles at a rate of 3%.

One vehicle is purchased from a private owner for $2,000 (97 Jeep)

One vehicle is purchased from a car dealer for $2,000 (97 Jeep)

One vehicle is purchased for $22,000 from a car dealer (2007 Mazda) traded in a $20,000 car.

It would seem the person who paid the most for his/he car would pay the most tax; not so.

The first vehicle purchased from a private owner for $2,000 was taxed on a value of $2,800, a 40% increase over the sales price.  The state contracts a firm to determine the average price of all like kind vehicles and uses this sales price irregardless of what the person actually paid for all private sales tax computations.   This person also sold his prior vehicle but received no credit for the vehicle sold.

The person who purchased the $2,000 car from a dealer was taxed on the actual sales price of the vehicle, $2,000.

The Mazda purchased from the dealer was taxed on the difference of the sales price and the trade in, for a total of $2,000.  Therefore the vehicle never gets taxed on the actual sales price.

The tax law favors those that buy the most expensive vehicles, the tax is capped at $1,000, therefore individuals who purchased vehicles for over $33,000 receive a tax rate that is lower than those who purchased lower priced vehicles.  Once again the politicians have taken care of their friends who buy more expensive vehicles and those of us that buy vehicles from our friends and neighbor (private sales) shoulder the higher tax burden. 

Now let's take another example of a vehicle sale.  A tricked out 82 Chevy Impala, with a $2,000 paint job and a set of $3,000 wheels  is sold on a private sale for $5,000 and the purchaser has a receipt for the sale.  Because the state uses the "average" sale price of 82 Chevy Impala's (apx $600.00) the person is taxed only on the $600, even if the purchaser presents the bill of sale the DMV will reject and not use the actual sales price in the computation of the sales/use tax.

How incompetent can our law-makers be?  No other state does this we must get smarter and elect leaders who look at these dumb laws and fix them.

After taking office I will tax all vehicles sales on the actual sales price of the vehicle, this may cause those that pay more for their vehicle to pay more tax but it will be fair and  the same rate of 3% will be applied to all sales. Persons who buy vehicles over $33,000 will be taxed at the same rate rather than a reduced rate. 

This will bring, by a conservative estimate, another 80 million dollars in state revenue by taxing everyone fairly and equally. Those who buy less expensive vehicles will pay less and those who buy more expensive vehicles will pay more. This, in my opinion, is a common sense approach that will provide fair taxation to all.  

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