Suspicious new vehicle tax?

So, I’m looking at buying a new car from an authorized dealer, and when they gave me the total price—which already includes sales tax, import fees, and all the extra options from $21829—they tacked on a special luxury tax of $2401 (which works out to about 11% of the sticker price)

The thing is, I actually took some time to dig through the federal tax code for motor vehicles and did my own math for $1528 (which should be roughly 7% of the sale price)

Basically, the dealer is charging me 4% more than what my calculations show

I don't think I missed anything, but if anyone here is good with numbers, could you take a look? Here’s the breakdown for the vehicle:

• Total sale price including sales tax, import fees, and extras=$21829
• CO2 emissions (grams per kilometer) per manufacturer specs=130

That should be enough info to run the numbers

A few extra details just in case:

• Combined fuel consumption (mpg/62 miles)=roughly 40 miles per gallon
• Engine displacement (cc)=1149
• Emissions standard=EPA Tier 3 compliant
• Curb weight (lbs)=2436
• Max power (hp)=74
• Fuel type=Gasoline
• Transmission=Manual

I’m honestly just curious about the logic behind hitting a budget-friendly car that isn't even high-polluting with an 11% special tax
Seems a little steep to me

http://www.cbp.gov/tools-help/calculator

This calculator ought to be accurate enough 😁

hiddenpilot3 said:http://www.cbp.gov/tools-help/calculator

This calculator ought to be accurate enough 😁

Actually, the calculator is accurate. I just ran my own numbers and they match up perfectly.

So, why is the shop charging me 11% when my math keeps coming out at 7%?

Total thieves.

From what I can see, you've got an amount listed on the invoice. Usually, Customs doesn't even look at the actual receipt; they just slap a tax on whatever value they pull from their own catalog. So, even if it’s 7%, it might not be based on your total, but rather on their specific tax base.

Zachary Kern35 said:From what I can see, you've got an amount listed on the invoice. Usually, Customs doesn't even look at the actual receipt; they just slap a tax on whatever value they pull from their own catalog. So, even if it’s 7%, it might not be based on your total, but rather on their specific tax base.

The tax base for a sale price of $21829 is actually 1%.
It's right there in the federal tax tables for motor vehicle excise taxes—pretty clear-cut if you look it up.
The next bracket where the tax base jumps to 2% starts at $33333, and the car I'm eyeing isn't even in the ballpark of that number.

Then, you take that tax base from the sales price (which is 1% for me) and add the CO2 emissions tax. My car sits at 130 grams per kilometer (just pulled that straight from the official manufacturer's website), so I look that up under the "gasoline" column in the table, which comes out to 6%.

You just add those two percentages together, and that’s the total rate applied to the vehicle's value.

I'm just trying to wrap my head around how the dealer ended up with 11% when my math keeps landing on 7%. Any ideas?

Wait—whose brilliant idea was it to charge taxes on cars that are already ten years old?!!!

Paul White3 said:Wait—whose brilliant idea was it to charge taxes on cars that are already ten years old?!!!

Look, we aren't really talking about sales tax here. It’s that specific vehicle excise tax that got rolled out once we joined the EU.

The whole logic is supposed to be that luxury rides (the pricey ones) and high-emission gas guzzlers get hit harder than the budget-friendly, eco-conscious stuff.

I mean, I try to follow the reasoning, but then they turn around and slap an extra 11% on my little economy car. Makes zero sense.

Total highway robbery.

The sticker price and the taxable amount aren't the same thing.
Technically, the tax base is what the car is worth in the US, and since they use the MSRP, it’s usually way higher than what you actually pay.

If your receipt says 11% sales tax, then it's 11%. If it doesn't say that, there's really no point in overthinking it.

Zachary Kern35 said:The sticker price and the taxable amount aren't the same thing.
Technically, the tax base is what the car is worth in the US, and since they use the MSRP, it’s usually way higher than what you actually pay.

If your receipt says 11% sales tax, then it's 11%. If it doesn't say that, there's really no point in overthinking it.

They use the catalog value to set the price for used cars, which is what they call the "market value."

But I'm talking about buying a brand-new car here, where everything is crystal clear. The dealer sets the sale price, and from that, they calculate the tax base plus the CO2 fees.

I don't have the final bill yet—the dealer just gave me an informal quote, and if I pull the trigger, that's the number I'd be stuck with.

My question is, how did they come up with an 11% special tax when my own math keeps coming out to 7%?

Robin Clark said:They use the catalog value to set the price for used cars, which is what they call the "market value."

But I'm talking about buying a brand-new car here, where everything is crystal clear. The dealer sets the sale price, and from that, they calculate the tax base plus the CO2 fees.

I don't have the final bill yet—the dealer just gave me an informal quote, and if I pull the trigger, that's the number I'd be stuck with.

My question is, how did they come up with an 11% special tax when my own math keeps coming out to 7%?

And what happens if you actually ask the dealer? 🤔

I actually got confirmation on a legal forum that my math was spot on.

I'm going to reach out to the dealer and ask them to walk me through their tax calculations. I need to know why they're coming up with $873 higher totals than what I'm seeing on my end.

Honestly, this is just what we get with the EU.
You’d think importing cars from Europe would make things cheaper—less paperwork, fewer taxes, smoother process—but instead, they end up being even more expensive.
Man, there is just zero logic to it.

Congratulations! I really think you should have probably handled that first step before jumping straight into posting the request...

Robin Clark said:I actually got confirmation on a legal forum that my math was spot on.

I'm going to reach out to the dealer and ask them to walk me through their tax calculations. I need to know why they're coming up with $873 higher totals than what I'm seeing on my end.

Honestly, this is just what we get with the EU.
You’d think importing cars from Europe would make things cheaper—less paperwork, fewer taxes, smoother process—but instead, they end up being even more expensive.
Man, there is just zero logic to it.

I mean, I don't think you have anything better to do with your time...
He’ll give you the market value, but then he calculates everything based on a catalog price that might not even match what you actually paid...
What that means is they sell you the car at one price, but they are legally required to calculate that special tax based on the catalog value... so, really, don't waste your breath overthinking it.
It isn't the dealer's fault; it's Customs...

vividraven50 said:I mean, I don't think you have anything better to do with your time...
He’ll give you the market value, but then he calculates everything based on a catalog price that might not even match what you actually paid...
What that means is they sell you the car at one price, but they are legally required to calculate that special tax based on the catalog value... so, really, don't waste your breath overthinking it.
It isn't the dealer's fault; it's Customs...

Good grief, here I am writing the exact same thing for the second time:

Market value is defined as the value of a used motor vehicle within the American market on the day the special tax base is determined. (this applies to used vehicles)

The sale price is the retail price of a new motor vehicle, including customs and sales tax, but excluding special tax. The sale price also includes the value of any optional equipment installed in the vehicle. (this applies to new vehicles)

Copied straight from the US laws regarding special motor vehicle taxes.

I'm not sure which catalog you're talking about; that's how things work when you buy used cars.

But we are talking about buying a new car here.

And it's not a Customs issue, it's a dealer issue because they handle the homologation during import and then they're the ones calculating the special tax when they sell it.

And something feels off there, since they're calculating a higher amount than what's actually happening.
Knowing how some people in America operate, that extra cushion probably ends up in someone's pocket every time a car is sold.

I really don't want to argue anymore. Please, folks, just read carefully before responding, because the situation here is as clear as day.

Out of 14 posts in this thread, 9 of them are pure spam.

Robin Clark said:Good grief, here I am writing the exact same thing for the second time:

Market value is defined as the value of a used motor vehicle within the American market on the day the special tax base is determined. (this applies to used vehicles)

The sale price is the retail price of a new motor vehicle, including customs and sales tax, but excluding special tax. The sale price also includes the value of any optional equipment installed in the vehicle. (this applies to new vehicles)

Copied straight from the US laws regarding special motor vehicle taxes.

I'm not sure which catalog you're talking about; that's how things work when you buy used cars.

But we are talking about buying a new car here.

And it's not a Customs issue, it's a dealer issue because they handle the homologation during import and then they're the ones calculating the special tax when they sell it.

And something feels off there, since they're calculating a higher amount than what's actually happening.
Knowing how some people in America operate, that extra cushion probably ends up in someone's pocket every time a car is sold.

I really don't want to argue anymore. Please, folks, just read carefully before responding, because the situation here is as clear as day.

Out of 14 posts in this thread, 9 of them are pure spam.

If you ask me, you're just acting smart, and people like you... well, they usually end up in a psych ward sooner rather than later.
Sir, those vehicles being imported into the US have to be reported via Intrastat; they have to report the VIN accurately, and based on that specific number, they are required to pay the CO2 tax.
I'm simply suggesting that maybe they didn't pay the CO2 tax based on the price they quoted you... perhaps you were just lucky and they gave you one with a defect, and now you'll be constantly repairing it. You could have gone down there first thing in the morning and waited for them to explain themselves...
If that is the amount they quoted you, then that is the amount you're stuck with...

vividraven50 said:If you ask me, you're just acting smart, and people like you... well, they usually end up in a psych ward sooner rather than later.
Sir, those vehicles being imported into the US have to be reported via Intrastat; they have to report the VIN accurately, and based on that specific number, they are required to pay the CO2 tax.
I'm simply suggesting that maybe they didn't pay the CO2 tax based on the price they quoted you... perhaps you were just lucky and they gave you one with a defect, and now you'll be constantly repairing it. You could have gone down there first thing in the morning and waited for them to explain themselves...
If that is the amount they quoted you, then that is the amount you're stuck with...

They didn't pay anything, and neither did I. The dealer just gave me an informal quote, basically saying if I bought it at that price, that's what it would cost.
What does a VIN have to do with CO2 emissions?
The manufacturer sets the CO2 emission levels because the car has European certification or a COC certificate that lists the specific emission data.
Here in the US, when importing, we just copy the info from that certificate. There aren't any actual tests or measurements performed because, again, the car already has its certification—we just transcribe it from the COC.
A specific tax (in this case, at this dealership) was calculated incorrectly by the distributor to the buyer's detriment, and I am 100% sure about that right now.

And please stop spamming. It's pretty obvious you don't get how this works and don't have anything intelligent to contribute.

I don't know. Have you actually looked into whether there’s any distinction made between a locally registered vehicle and an imported one?
It's likely that an all-electric car wouldn't run into these specific tax issues—I guess.—

Robin Clark said:They didn't pay anything, and neither did I. The dealer just gave me an informal quote, basically saying if I bought it at that price, that's what it would cost.
What does a VIN have to do with CO2 emissions?
The manufacturer sets the CO2 emission levels because the car has European certification or a COC certificate that lists the specific emission data.
Here in the US, when importing, we just copy the info from that certificate. There aren't any actual tests or measurements performed because, again, the car already has its certification—we just transcribe it from the COC.
A specific tax (in this case, at this dealership) was calculated incorrectly by the distributor to the buyer's detriment, and I am 100% sure about that right now.

And please stop spamming. It's pretty obvious you don't get how this works and don't have anything intelligent to contribute.

You haven't even bought the car yet, and you're already acting like an expert... as if a gentleman could somehow uncover or divine the CO2 levels just by looking at a VIN.

I honestly can't believe I'm still thinking about this. It’s like my brain just gets stuck on loop sometimes. Anyway, I was looking back at those old discussions from Ludaraba 3—you know, that whole situation? It’s funny how much things change. Just one of those things that stays on your mind. Life moves fast! kaže:
I don't know. Have you actually looked into whether there’s any real difference between registering a vehicle locally versus importing one?
Maybe if you go all-in on an EV, you won't have to deal with half these tax headaches. It’s a pretty solid way to dodge some of that extra paperwork and cost.

Electric cars get a total pass on that special tax, which is pretty sweet. Even RVs get a massive 85% discount now. It's all changing.

You haven't even bought one yet, and you're already trying to play scientist. Honestly, it’s kind of funny. You're acting like if we just stare at the VIN number long enough, we'll somehow uncover some grand mystery or magically detect CO2 levels through sheer willpower. Slow down there, professor!

You really should crunch those numbers before you buy, not after. It's much easier that way.

Nah, that's not how it works. For any new cars manufactured here in the USA, the CO2 levels are already baked right into the Certificate of Conformity. When you go through the import process, you have to deal with the local vehicle certification, but honestly, it’s just a formality. You're basically just copying down what's already written on the COC certificate. It's all just paperwork.
And at the very end, they just log that CO2 number right into the vehicle registration papers when you first register the car.
It’s pretty much automatic at the dealerships once those new cars hit the lot. Everything just flows.
If I were importing a car myself, I feel like I should be the one actually doing the heavy lifting. Just my two cents.