I bought the BRZ last July and listed $7K on the title. Seemed reasonable for a Subaru with a rebuilt title from a friend, right? I paid $525 in sales tax at that time plus the plates, no big deal.
I just got a certified letter from Ohio Dept of Taxation that I owe another $645 plus just over $100 in "Assessment Penalty on Tax", whatever the berkeley that means. The letter even lists the $7K purchase price and tax rate of 7.5%... Any experience with this horseE36 M3?
In PA, all you need is a signed (by the seller) bill of sale to shut them up.
In TX, you're screwed because they don't care what the sale price is, they go off a magical black book value that you don't have access to.
Not sure about OH.
In reply to Jerry :
NO. No experience with and I'm in Ohio
But, I once sold a Pontiac Vibe with a low price on the title. Eventually a letter arrived at my house (non certified mail) that was a questionnaire from the state. It seems they send the letter to the buyer and the letter to the seller asking them each what the sale price was. I spoke to the buyer and since the letter arrived uncertified there is no real proof that we actually got the letter. We both threw the paperwork away. Never heard any more. It was probably 4-5 years ago.
Did either of you get similar letter? Seems they try to get one party to admit to a higher price.
$645 more in tax at 7.5% is like they are hitting for another $8.5k in purchase price or a total $13.5k purchase price.
In reply to Jerry :
Are you sure that they are not saying that you didn't pay the original $525?
Javelin said:In reply to Jerry :
Are you sure that they are not saying that you didn't pay the original $525?
I don't know. The letter says purchase prince $7k, Montgomery Cty, rate 7.5%, Audit type: Office audit. Then a box below with $645.22 tax due, and the fees adding up to $753.61.
This sucks!
State site shows the questionnaire they send the seller and the buyer. It then shows a tax due letter based on the info from the previous letters. The 4th thing shown is an Office Audit where it seem the office just handles the whole thing for you...in your case.
In the letter you got, page two says:
If you disagree with the details of the title transfer, please send a completed questionnaire and acceptable supporting documentation. The questionnaire is located on our website at: tax.ohio.gov. Acceptable documentation includes a bill of sale, notarized statement from seller, proof of payment (i.e. cancelled check), proof of trade value, etc. Please note a receipt from the clerk of court or title agency is not acceptable documentation.
Jerry said:Javelin said:In reply to Jerry :
Are you sure that they are not saying that you didn't pay the original $525?
I don't know. The letter says purchase prince $7k, Montgomery Cty, rate 7.5%, Audit type: Office audit. Then a box below with $645.22 tax due, and the fees adding up to $753.61.
Yeah that reads to me that they have no idea that you paid the tax originally. Still has the same $7000 purchase price so it's not a disagreement on value. Do you have your original tax receipt and a bank statement showing the money cleared to the state?
When you transfer title, the title fee IS the state sales tax. You can't get a title without paying the tax. IIRC the taxes paid is even listed on your title.
It sounds to me like they looked at what BR-Zs are going for and believe that you and the seller are making up a low number to cheat on taxes. Do you have any kind of financial proof of what you paid for it? (Also, is the for sale ad still around?)
I have the receipt from the title office showing I paid $525 plus some fees. I have a file folder with assorted paperwork I can also check when I don't have a cat and dog laying in my lap.
In reply to Jerry :
I'd start with bringing your receipt in. Probably an automated system not getting the inputs it's supposed to.
With the letter showing a $7,000 value I really doubt that they are trying to get you for anything more.
Maybe the seller got the same letter, and put a different price in it? I've gotten the letter after selling Curtis's Impala SS, and after buying a Honda Big Ruckus for a really good price, so I suspect the flag purchases that deviate significantly in price from other sales in their records.
Edit: To clarify, the letters I got were the ones asking about the prices I sold/paid for the vehicles, not a bill with penalties.
This happened to me once in Wisconsin circa 2008.
I bought a Lexus IS300 and agreed with the seller on a lower, but not ridiculously low number to put on the title as the purchase price to save a few bucks.
The state disagreed with that number and charged me a tax penalty of $800 plus interest. It sucked.
I could never get a hold of the guy again so don't know if they called him to verify and he blabbed the real number or what. But it definitely seemed like the price was under a certain threshold to "flag" an audit at the state revenue department.
I would guess something similar is happening here. Your number probably came in low enough to trigger an audit at the state level. Now you have to back up your number.
($7k is ridiculously low for any BRZ BTW, even salvage title cars are north of $10k with the current crazy car market)
This thread has been high on my mind since I too am in Ohio and could be subject to similar....
I seem to remember sometime in the past, someone was campaigning on this topic that they were going to "correct" this undertaxing of understated purchase prices. Might have been State Auditor or Secretary or State or some similar title.
Some states already tax based off a "state formulated value" regardless of actual purchase price, but Ohio is not set up for that kind of valuation. I wonder if this is the process flow:
This leads me to wonder, "what can big brother see that you think maybe they can't see?" It seems they are ruling that it really was a $13.5k-ish purchase.
I'm not so much asking for an answer. Certainly don't self incriminate. This is an interesting learning experience.
Just recently, I sold a car. The payment was in cash. We completed the cash transaction in private (in the lobby of the bank) but then in a bank office had the bank employee notarize the transaction, and price (as required by Ohio car sales.) We were at my bank branch. I now realize that the deposit I made to my checking account before leaving the bank branch may seem confusing to the state. They may wonder why I deposited exactly $2k more than the stated car sale price. I now wonder if the state will want explanation that I deposited $2k of my own money into my account in that transaction (so as to save another trip to the bank.)
In the future, I will save that second deposit of "additional funds" for another day/week/visit.
So, it seems that the state has enough to have high suspicion but that alone does not make you guilty. The letter says you can rebuttal. From page two of your letter it seems that requires:
Acceptable documentation includes a bill of sale, notarized statement from seller, proof of payment (i.e. cancelled check), proof of trade value, etc.
So, if you want to hold your ground, it seems that a bill of sale, then notarized making it a sworn statement signed by both buyer and seller will be the minimum needed.
Of course, in "holding your ground" if the state rules it to be insufficient evidence (contrary to some evidence that they must feel they have) then the penalty, according to the questionnaire letter is: Any false representation of the price would be in violation of Ohio Revised Code section 2921.13. Violation of this section is punishable by a fine of up to $1,000 or six (6) months imprisonment, or both.
At this point, it seem that the state is offering you no admission of guilt but still a $100 fine for delay of paying the entire tax due (as a $13.5k-ish sale.)
Did someone (buyer or seller) deposit or withdraw more than $10k in cash on or near the day of this sale? $10k requires report to gov't The bank doesn't have to make you aware they are reporting it...they just report it.
Delaware avoids all this by just assuming Bluebook value, no matter what you paid.
I bought the car from someone here, I will double check but 99% sure he didn't say anything higher. There's a questionnaire I will look into after work.
This title looks like it should be sung to the tune of the Star Spangled Banner
OH says my B-R-Z
Must pay Seven Fifty!
For the price that I claimed
Does not match the book value!
I could be wrong here, but you initially paid the state sales tax and now you have to pay your county/city sales tax.
In reply to iammclovin804 :
State sales tax is different depending on county in Ohio. I gave up trying to figure it out, because they don't have separate state and county tax, just different state tax rates.
In reply to Pete. (l33t FS) :
From Ohio Tax website:
The state sales and use tax rate is 5.75 percent. Counties and regional transit authorities may levy additional sales and use taxes. For more information about the sales and use tax, look at the options below.
So, it is 5.75% plus, plus. Those pluses can be added by county and city.
Purchases in my rural county/city are 6.75%. Purchases in your urban county/city are 8% Map
In reply to John Welsh :
Right, but it is not broken down. It is just marked as 8% or whatever.
In all the cars I've bought in my life, this is the first time they've asked for more than what I paid at the DMV. I just submitted an Online Notice Response Service with the basic info on the car and what I paid, and included a PDF of the title receipt showing the check # and $525 plus fees I paid. If anything I hope they call so I can speak to a human. Figuring out what to do online was a mess.
I think Ohio is getting desperate...
My step-daughter moved back here to Cincinnati in February of 21. She has been getting notices from the state about her not filing for 2020.
John Welsh said:This sucks!
State site shows the questionnaire they send the seller and the buyer. It then shows a tax due letter based on the info from the previous letters. The 4th thing shown is an Office Audit where it seem the office just handles the whole thing for you...in your case.
In the letter you got, page two says:
If you disagree with the details of the title transfer, please send a completed questionnaire and acceptable supporting documentation. The questionnaire is located on our website at: tax.ohio.gov. Acceptable documentation includes a bill of sale, notarized statement from seller, proof of payment (i.e. cancelled check), proof of trade value, etc.
Jerry, I think you have sent them exactly what they request you to NOT SEND THEM.
From above: Please note a receipt from the clerk of court or title agency is not acceptable documentation.
They are not questioning that you paid sales tax for a $7,000 purchase. Your letter even acknowledges that you paid the proper sales tax on a $7,000 purchase. So, if you send them a receipt for paying sales tax on a $7,000 purchase you are only sending them what they already know.
The reason they are contacting you is they have suspicion that you under reported the purchase price. They have suspicion that you paid $13,500-ish for the car...and they want the tax money that a genuine $13,500 purchase would generate. What they are asking for is some sort of proof that you paid just $7,000.
I'd be happy to talk off-line: ....jwelsh02...yahoo...
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