Paying taxes on these cars

[twobjshelbys]

The argument of the first owner of a home made vehicle (if your state allows that for Kits, so be it) is that you paid sales tax on all of the components. If you are a manufacturer you don't pay sales tax on your components and thus the first consumer pays the tax. The same is true of your plumber - when he buys a water to fix your broken one he doesn't pay sales tax - you do.

In Colorado a kit that comes with a MSO requires the payment of sales tax on the roller. it does not include the engine or power train if that was acquired at retail prices and included sales tax AND HAVE A RECEIPT STATING SO. Regrettably if you bought it from eBay and didn't pay sales tax (at either end) then you owe sales tax on that portion too.

[elmariachi]

Originally Posted by Stoney FFR

It would be very difficult to say that a Factory Five Racing vehicle is not a KIT, since FFR openly states they sell KITS.. Additionally, FFR issues MSO's, so that clearly is an indication that it's a KIT under their definition and not HOME-MADE or SHOP-MADE

Stoney is 100% spot on. A lot of people have gotten away from not paying sales tax when they should have simply because the local county tax assessor (where auto titling and licensing takes place) is NOT the taxing authority for sales tax on any vehicles EXCEPT normal production cars. Where these assembled and kit cars are concerned, the local tag offices assume because components were involved, the state would have collected its sales tax in the normal course of you acquiring all the parts. That fallacy in thinking bled over to MSO kit cars and some some guys have gotten away with paying no taxes.

Joe originally asked if he would have to pay taxes. Links have been posted that should help explain what SHOULD happen, but as Stoney as pointed out, what actually happens with the lady behind the window is impossible to predict.

[madmaxx]

Here you go, i went to your link, searched assembled vehcile and paged down. NO TAXES!!! No component is a vehicle in our cars when built,



Example 4

ACCESSORIES PURCHASED TO COMBINE INTO A MOTOR VEHICLE

When parts and accessories are purchased to be combined into a motor vehicle and no single part or accessory is a motor vehicle, motor vehicle tax is not due when the builder initially titles the motor vehicle. A motor vehicle built from parts is commonly called a "home-made" or "shop-made" motor vehicle.




The taxpayer pays Limited sales and use tax on each part or accessory ordered to build a motor vehicle. Motor vehicle tax is not due when the taxpayer (builder) initially titles the truck.



Note:

The only time motor vehicle tax is not due on a homemade motor vehicle is when the vehicle is initially titled by the person who actually built it. Once a vehicle has been titled or registered by the person who built it, motor vehicle tax is due on all subsequent sales.



Motor vehicle tax is due from the person who custom orders a motor vehicle to be built because someone else is the actual builder. However, no motor vehicle tax is due when an individual purchases component parts and then hires another person to assemble them into a motor vehicle.

[madmaxx]

I purchase a chassis, an engine, a transmission and assemble. No piece constituted a vehicle, but they were combined to make one. Is a SPF or Kirkham a kit or component?

[elmariachi]

A SPF or Kirkham is a finished car and comes with an MSO just like a Ford or Chevy. If you buy it from a licensed Texas auto dealer the law says they are required to collect sales tax. If they didn't collect it, you are still liable.

If you buy a body, engine, tranny etc and assemble a car, you are not supposed to pay sales tax when you title and register. But that is because the state is assuming you filed forms 01-156 and paid the Occasional Use Taxes discussed here:

Occasional Use Tax

Did you file those forms on your components?

[madmaxx]

SPF / Kirkhams are not finished, you cant drive them until assembly of drivetrain is complete. I am sure everyone has used that form, just the other day I bought a shirt off ebay and filed it.

[Stoney FFR]

Madmaxx,

I know your sensible enough to see that the various laws are ambigious and hazy, to say the least. To claim that I broke the law because of how my car was registered and titled is out of line in my opinion. In any event, I certainly don't see clear, concise and convincing written law that says a person is NOT required to pay State tax on a Factory Five Kit. This is the reason my original post mentioned that some do and some don't pay tax. It really comes down to what you can work out with the person at the window. Do as you want in the future, but I certainy won't be telling people that no tax is due and acting like everyone else is wrong if they get their cars titled and registered in a different manner.

[madmaxx]

I meant no personal attack by claiming you broke the law, I apologize. I agree there is alot of grey area. When I registered one years ago, I do not remember the "home made" statement, and in the new verbaige I dont see "assembled vehicle" used as a noun. I am sure one can be convinced either way. In the end on a $30K car at 6.125% we are talking $1800, not enough to change my retirement date.

I also agree I have beat this one to death and in the end I dont know who is "legal"

[Stoney FFR]

Originally Posted by madmaxx

I meant no personal attack by claiming you broke the law, I apologize. I agree there is alot of grey area. When I registered one years ago, I do not remember the "home made" statement, and in the new verbaige I dont see "assembled vehicle" used as a noun. I am sure one can be convinced either way. In the end on a $30K car at 6.125% we are talking $1800, not enough to change my retirement date.

I also agree I have beat this one to death and in the end I dont know who is "legal"

Thanks, no offense taken. We need to get together at some point so I can buy the first round and we can figue out how to achieve world peace!

Regards, Joe - -