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Buying car out of state/excise tax

Discussion in 'Off-Topic' started by Synyster, Jul 19, 2019.

  1. Synyster

    Synyster

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    Two scenarios here: I live in MA.

    1. Buying a used truck in NH. I will probably trade my current into the dealership and swap plates for the used truck I purchase. If the dealer doesn't have a service that makes the registry run for me the day of purchase, can I legally swap the plates to the truck I purchase and drive back into MA to the registry with the paperwork, get it inspected, etc? I believe I have 7 days if that is the case?

    2. Leasing a brand new truck in MA. I got a quote from the dealer per month which included excise tax. I thought excise tax was paid out once a year? But this dealer is telling me they roll the excise tax into the lease payments that way you don't have to pay one lump sum every year. Is this true? I'd hate to have them roll the excise tax payment into the lease, then also get billed the excise tax once a year for the three years I lease.

    Thank you.
     

  2. Asaltweapon

    Asaltweapon NES Member

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    #1 Call your agent and just tell them. Fully legal but keep all your paperwork to prove the date. Depends on the dealer but they did all my paperwork and all I had to do was get it inspected.

    #2 Not a clue.
     
  3. Len-2A Training

    Len-2A Training Instructor Instructor NES Life Member NES Member

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    As a MA inmate I purchased a car in RI. RI dealerships don't go to MA RMVs, so I had to pick up their paperwork, go to insurance company to get a stamp (and they did the plate swap) then drive back to the dealership to put the plates on the car and drive home. I also had to bring it for inspection to a MA location. You will likely get no credit from MA Sales Tax on the trade in value either due to out of state transaction.

    When you buy from a MA dealer, you don't have to do all the running around and they will do the inspection (or get it done).

    I wouldn't trust anyone to make tax payments for me. I get the bill and pay it.
     
  4. RumRunner

    RumRunner NES Member

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    I've bought vehicles in NH, used the temp plate from the dealer and did the transfer back in MA. You can also put your old plate on and have the 2 days (I think) to do the transfer as long as you have the bill of sale that has a date on it with you. No idea about a lease, have never done one.
     
  5. gokeeffe

    gokeeffe

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    I bought two cars out of state while living in MA.

    Once in NH, where I traded in my old Grand Cherokee and bought a new 4Runner from Toyota of Nashua. They didn't do the RMV paperwork for me. We just switched the plates and I drove the new car back to MA. I had to pay the sales tax (only on the difference between trade and purchase price), get an inspection and do the plate transfer myself. My insurance broker did it all for me, so it was easy.

    The second time I bought a Mustang in New Jersey. In that case, I wasn't transferring plates. I got a NJ temp plate, had to get insurance on the car before I drove it home and the dealer took care of all the sales tax mess. It might have been a NJ thing, where they had to jump through some hoops so that I didn't pay the NJ sales tax. The dealer took the sales tax from me, figured it out with MA and NJ, got me MA plates which were mailed to them in NJ, which they then mailed to me. It took about 2 weeks. Buying in NH was a much simpler process.

    I have leased in MA, but it was years ago. I've been quoted lease payments including sales tax but never excise tax. Some dealers will quote you without the sales tax to make the deal sound better. When I did lease, I always got the excise tax bill mailed directly to me. I don't know how they would set it up to have the bill mailed to leasing company. I've never heard of excise tax being rolled into a lease payment, so I would be very wary of that one.
     
  6. snax

    snax NES Member

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    I bought a truck in central CT.
    They did EVERYTHING!
    They went all the way to the Springfield RMV for me. Drove truck up on a dealer plate, did the plate swap, registration, and while in Springfield had it inspected.
    I bought at Autofair in Manchester.
    They did nothing for me. Car sat and waited for me for 3 weeks.
    Too bad I signed before I realized they would screw everything up.
    They did, however, let me borrow a dealer plate to get it home. Couldnt give me a NH 30 day plate, cant remember why.

    I leased 2 Hondas and I had a lump sum excise payment a month or two after they got the bill for it.
     
  7. wilson911

    wilson911

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    If you are buying from a NH dealer, they will put a temporary plate on it so you can drive home. You would then have 20 days on the temp tag to transfer your MA plates at the RMV.
     
  8. buckfarack

    buckfarack NES Member

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    1. You have 7 days to go to the RMV from the date you transfer the plates to the newly acquired vehicle but you should make sure your insurance provider binds coverage on the new vehicle first and also keep a copy of the paperwork in the car during the 7 day period. Out of State dealers are not on the DRIVE Program so they can't issue plates at the dealership, however many NH, RI & CT dealers that are close to the MA border will send a runner to the RMV to do the transaction for you. When they do this, the RMV1 form needs and insurance stamp which can be done either by your agent or a "Courtesy Stamp" can be arranged with a geographically closer Agent that represents your insurer (this is usually arranged by the out of state dealer w/ an agent local to them and your insurance agent needs to authorize the other Agent to do the courtesy stamp). Many agents charge a fee for a courtesy stamp which the dealer pays for, if you're going to the RMV yourself and want to get a courtesy stamp from another agent you should make sure you know if they charge a fee. We charge $40 for a courtesy stamp. For example: We're close to the RI border, we have insureds who buy cars from NH or CT dealers fairly regularly, those dealers will usually ask us to approve a courtesy stamp at an agent closer to them. Sometimes our insured wants to go directly to the RMV from the out of state dealer and will ask us to arrange a courtesy stamp for them (this usually happens when they need a new plate, not a transfer, otherwise they just bring it to us for a stamp and go to the RMV locally)

    2. I think the way Excise tax is handled varies by leasing company, I have done company leases for years and have had it done both ways.
     
  9. buckfarack

    buckfarack NES Member

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    Do not do this, MA does not recognize temporary plates from other states and you do not have 20 days on an out of state temp tag in MA. In addition, your insurance carrier most likely won't be able to add the car to your policy until it's registered in MA and those few companies that will add before it's registered will send you nastygrams if it's not registered within a week or so. I have no doubt that people do this and get away with it, but if you get pulled over or you get in an accident it'll be a headache.
     
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  10. FPrice

    FPrice Retired Zoomie NES Life Member NES Member

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    I leased my CRV from 2014-2017. IIRC, they paid the excise tax (monthly) from my monthly lease payment. Because (again IIRC) the leasing company actually owns the vehicle title, you are just paying them for it. I'd have to dig out my paperwork on the car to see. I'll have to see if they sent me an annual statement so that I could claim the excise tax on my income tax.

    Disclaimer: I am working on memory and may be in error

    Added: I was correct, mostly. Honda Leasing paid the excise tax and then charged me that amount. They sent me documentation so that I could claim this on my federal tax. As buckfarack mentioned, other companies may do it differently.
     
    Last edited: Jul 19, 2019
  11. wilson911

    wilson911

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    I did not know this. Did it several times when I lived in MA and had no issues. Did this change since I moved out of MA, or did I just get lucky?
     
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  12. buckfarack

    buckfarack NES Member

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    You got lucky, it's been that way for at least the past 25 years.
     
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  13. qqac

    qqac

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    The lease will typically include sales tax, but not excise tax. Excise tax will be billed to the owner of record, i.e. the leasing company, and the leasing company will tack the extra charge onto the next lease bill. An amount for excise tax theoretically can be rolled into a lease, but it would be a little difficult to roll the excise tax into a lease in a fair manner, since the excise changes annually, and the lease payments are level from month to month, other than special passthrough expenses like the aforementioned annual excise tax.
     
    Last edited: Jul 19, 2019
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  14. gokeeffe

    gokeeffe

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    I called the RMV about this when I bought my Mustang. They said I could drive it back to MA on a temp NJ plate, but couldn't drive it around once I got here. So it stayed parked in my driveway for 2 weeks while I was waiting for plates. I had no issues bringing it back to MA though.

    I was going to lease a RAM 1500 Big Horn right before I left MA. It was a sweetheart lease deal. Like $230 a month for a $39k truck. The lease was with US Bank. I ended up having to let it go because nobody could figure out if I could take the truck out of MA. The dealer (495 Jeep) said it depended on the lease company, so I called US Bank and they didn't know. They said it's generally not allowed, but couldn't say for sure. So if you're ever planning on getting out of MA, leasing might not be the way to go.
     
  15. Synyster

    Synyster

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    Here is the explanation from dealership about rolling excise tax into the lease payments. Trying to get into an XLT 302A F150 12k/yr for around $450/mo.

    Normally excise tax does get paid yearly, but on Ford leases they become part of the monthly payment. There are a few reasons for this. One of them is because people who like to lease want to make the least amount of payments as possible, so this just gives them one bill without having to worry about shelling out $1,200 in January. Another reason for it is you're only paying excise tax on 3 years' worth of the car, so they take the total excise tax you would have paid in 3 years and roll it into the payment. Normally that adds about $90 to the payment and includes sales tax as well.

     
  16. buckfarack

    buckfarack NES Member

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    People drive back w/ out of state temp plates all the time, as long as you don't get pulled over or into an accident there's generally no issue. Since MA doesn't recognize out of state temp plates on MA vehicles, you could get in trouble the minute you cross the state line IF you get pulled over or into an accident and coverage is not bound. The cop would look at the paperwork and the plate and most likely give you a ticket for an improperly registered vehicle.

    Surprised an RMV employee would tell you it was ok to drive it in MA under any circumstances w/ a temp plate, and it wouldn't have gotten you out of a ticket if you got pulled over, but I also understand the practicalities of the matter and sometimes it's easier just to take the chance. Leaving it in your driveway unregistered for a couple of weeks is ok, as long as nothing happens to the car that requires an insurance claim be filed (tree limb falls on it, stolen, etc).

    The worst thing you can do (and people do it all the time) is take the plates off one of your existing cars to put on a car you're driving back from out of state, and then put the plates back on the original car. Again, unless you get pulled over or in an accident nothing will probably come of it but if you do, then you're f***ed. Unless you have paperwork showing it's going to be a legitimate transfer of plates then the cop can get you for attaching plates which means the car gets immediately towed and it's a couple thousand in fines. If you get into an accident good luck explaining it to the insurance company, particularly if you still have the existing vehicle and it has a loan on it - you're only supposed to do a plate transfer if you're getting rid of the car the plate is being transferred from or you're taking that car off the road (if a car has a loan on it then you're required to maintain insurance on it so you wouldn't be able to transfer the plates from that car unless you trade it in/sell it).
     
  17. appraiser

    appraiser NES Member

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    There is a dealers license where I work, we NEVER do 20 day plates on a MA sale, we can do it in NH as the dealer 20 day tag is part of the registration/title paperwork, but not on a MA sale since we don't handle the title application. A Dealer sends the title app to NH DMV when a car is sold

    NH DMV will not issue a 20 day tag to a non resident.

    If you opt for the MA 7 day transfer, make sure your insurance agent has given you a stamped RMV-1, and check the box on your current registration that says " I have sold this vehicle" or something similar and SIGN IT.

    You may want to check on the sales tax implications of an out of state trade in and make sure they will credit you the value of the trade against the sales tax owed. Technically the tax on an out of state car purchase is a "use tax" and not a sales tax. You get a sales tax credit on the trade when buying from a licensed dealer, if MA does not recognize a NH dealer you are screwed.
     
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  18. greencobra

    greencobra NES Member

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    this was a while ago so my memory is fuzzy....i bought my dodge ram at allen mello in nashua. i seem to remember they did everything for me at the dealership. i would expect they sent a runner but working with my insurance company they had my plates transferred, paid the excise, new registration waiting for me and they sent someone down into mass. to have it inspected. i bought it on a sunday, they had me pick it up on tuesday. i'm stupid, but i always figured that 24 hours (monday) was for them to run around, get all the details taken care of, and it was waiting for me to drive off the lot tuesday morning. of course they did give me the option of rolling out sunday afternoon with the plates off my trade and taking care of it myself.
     
  19. Lsgun1

    Lsgun1

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    I've traded a car to a NH dealer and drove away with my old plates, insurance company said that was good to go. You'll need to do the registry stuff within the week.

    The leases I've had I have to pay excise tax on my own.
     
  20. dragonballzz

    dragonballzz

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    What is the correct way to do this then? Not just buying out of state but buying private party in MA? Tow the car home?
     
  21. HorizontalHunter

    HorizontalHunter NES Member

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    This.

    Only dealers that are licensed by the state of Massachusetts can deduct the trade in for tax purposes. There are dealers close to the Mass border that maintain a Mass dealers license for that reason.

    Once you make your deal have them give you a $1,000 for your trade in “on paper” and take the rest off of the car. The difference on the sale remains the same but you save a few bucks on the tax.

    My last car and RV were bought out of state. The Mass dealers wouldn’t even match the prices offered. We saved thousands buying out of state but it is more hassle. You have to do the running around.

    Bob
     
  22. HorizontalHunter

    HorizontalHunter NES Member

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    Let your insurance know and swap the plates. You still have the five business days to drive on the bill of sale.

    Bob
     
  23. buckfarack

    buckfarack NES Member

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    Depends, are you transferring the plate from one vehicle to the other or is it going to be an additional vehicle?

    If transferring plate then let your insurance know, take the plate off the old vehicle and put it on the newly acquired one and then make sure you go to the Registry within 7 days to do the transaction. HAve your insurance agent stamp the RMV1 Form for you and keep it in the car if possible. If buying from a dealer then keep a copy of the P&S in the car with you.

    If this is going to be an additional vehicle it means you have to get a new MA plate before you can legally drive it, and that might not be the most straightforward thing to do depending who you're buying the car from. First, call your insurance so they can at least bind coverage on the new vehicle (they'll tell you what they need, usually it's a copy of the title). If you're buying private party then see if they can deliver the car to you and then take their plates off before they leave. Sometimes people ask if they can drive it home with the seller's plate on it, we advise against this for a number of reasons. As the seller, if the buyer gets into an accident w/ your plates on it, you and your insurance will get dragged into it. As the buyer, you don't know if the guy has insurance on the car, what limits he has or even whether the plates are revoked. So sometimes people overnight the paperwork to each other and get the plates before picking up the car. Others have it shipped/towed.

    So here's a scenario that has happened once or twice (or maybe more ;)). Someone calls us, says they're buying a car from a private party or from out of state, picking it up the next day. They send me a copy of the title and tell me it's going to be a plate transfer from their car xyz. We bind coverage and email them an electronically stamped RMV1 for them to take with them and let them know that they have 7 days to go to the Registry to transfer the plate. The next day they call us, they have brought the car home and it's parked in their driveway. They have changed their mind and want to get a new plate for the newly acquired vehicle and not do a plate transfer after all... surprise surprise. We re-issue the RMV1 as a new plate instead and the old plates go back on that car. As long as they got home safe and sound, it's not an issue if they "change their mind". If they were to get into an accident then they'd have to proceed with the plate transfer and then get a new plate for the original vehicle they transferred the plate from and hope no one at the RMV notices (probably not a good idea to do both transactions at the Registry at the same time, and you'll need to have the original vehicle Title with you for a new plate so that car needs to be paid off, will be a mess at the RMV otherwise because you'll also be telling them that you changed your mind and decided to keep the car you transferred the plate from). And of course, we do not condone such mind changes <cough> but we also cannot stop people from changing their minds <wink>.
     
  24. appraiser

    appraiser NES Member

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    the 7 day transfer is only allowed IF YOU HAVE DISPOSED OF THE CAR THE PLATES CAME OFF OF.

    If it is sitting in your driveway, legally you can not do the 7 day transfer.

    People get jammed up on this all the time in small towns where the cops know what is in your driveway, and again if you have not checked off the boxes on the back of your registration that say I have disposed of this vehicle, and I want to transfer my plates..... and signed it, and some cop gets a hair across his/her backside, unregistered, uninsured, attaching improper plates is not something you want to try to clear up, especially with a $108 dollar tow bill and $35 a day storage until you show up with new plates, registration and insurance... because 99% of the tow yards are not releasing the car without it on orders of the Police dept that ordered it towed.
     
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  25. buckfarack

    buckfarack NES Member

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    Correct, although it’s rarely enforced unless as you mentioned a cop knows and has a hair across their ass. We tell people they have to dispose of the car but plenty of people transfer the plate, keep the car and then re register it again months or years down the road. I have never seen anyone have a problem at the RMV doing this. I decided as an insurance agency owner that our job is to insure cars not be the RMV police. I can’t force someone to get rid of the car and I can’t turn them away if they attempt to re register it. I warn them about using temporary out of state plates, taking a car w a dealer plate or not disposing of the car but at the end of the day we just insure it and if coverage is bound and they get jammed up with the popo/RMV it’s not our problem. And I have seen people pay dearly for attaching plates.
     
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  26. 42!

    42! NES Life Member NES Member

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    1. yes
    2. up to the leasing company what and how they want to charge you, Remember, you do NOT own the car, the leasing company does, you are leasing it. The owner is responsible for paying the tax. In this case they itemize the bill and pass the cost on to you. They could just as easily built the taxes into the lease payment. Of course if the owner didn't pay the taxes you could find yourself without a car to drive. On the other hand, if the deal was for you to pay the taxes directly, the leasing company could find themselve minus one car.
     
  27. Synyster

    Synyster

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    Thanks everyone. Sounds like MA may not give the tax credit. So I'll have to pay taxes on the purchase price of the truck itself not including whatever they gave me for my trade in? Am I understanding correctly?
     
  28. buckfarack

    buckfarack NES Member

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    When you buy a vehicle from a private party the MA RMV charges sales tax based on the book value of the vehicle, not what you paid for it (assuming it doesn’t qualify for a gift/family transfer exemption). When you buy from a register dealer, even an out of state one, they charge based on the sale price of the vehicle.
     
  29. Racenet

    Racenet NES Member

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    So, what do they do when I, as a NH resident, drive my new car with temp NH plates into MA? Ticket me? Arrest me?
     
  30. buckfarack

    buckfarack NES Member

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    Of course not, this only applies to MA domiciled/registered vehicles. If you’re a MA resident who owns a car in MA then you’re required to follow MA motor vehicle registration laws.
     
    Last edited: Jul 20, 2019

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