LUXURY TAX ? for dealers or anyone else.

[J DAWG]

I know this disappears at the end of the year, but can a USED car still have luxury tax applied to it. I was speaking with a guy who bought a car with 138 miles on it that had been previously titled for 2 months and then returned to the dealer and sold as a used car. The dealer charged him luxury tax on the car. I told him I did not know the answer and I don't know why the car was returned to the dealer and sold by them. Any ideas?

 

[J DAWG]

Follow up

Bill of sale designates car as USED

Inservice date on record as April, and he purchased it in June.

And IF this was not applicable, I assume a refund should be given.

 

[NJVIPER]

Once the car is previously (and legally) titled and then offered for re-sale, regardless of the mileage, luxury tax should not be collected.
A call to the local Motor Vehicle or a CARFAX would clearly identify this if the dealer had any doubt.
A bigger concern would be...the dealer did not know this...hummm.
A refund AND an sincere apology is required!
Be careful the dealer did not try to hit the poor person up for gas guzzler tax as well!!
Good luck.

 

[J DAWG]

I wonder if there is a time frame for recapturing these taxes, IF it turns out to be an error by the dealer.

So a CARFAX would give prior registration as well as taxes paid?

 

[NJVIPER]

Legally statutes of limitation for most items run 2 years. Again, luxury tax should never have been collected from this other guy you mentioned if the title was previously(legally) issued to someone else prior to their purchase of the car.
CARFAX "will not" do anything with prior taxes.
Spend the $20 for a CARFAX to find out..it's worth it..I did before I got my Viper...Good luck...

 

[Bill Pemberton Woodhouse]

It has been said before, but the answer is a definite No, the luxury tax is not collected when the car is purchased by the second owner. If the car was actually bought and not completely paid for, or never registered the first time, it could conceivably have an open title. This is unlikely, but Carfax, etc.,would show the original owner, and this is even unnecessary as the second buyer should have gotten a state title. If he got a Cert. Of Origin, then a gray area exists, and Lux Tax would need to be collected. Find out these areas , and it does sound like a refund is in the cards.