Philly resident purchase car out of city -- 8% sales tax?

**filmiracle** · 09-26-2012, 06:24 PM

I am a NE Philly resident and recently purchased a car from a reputable dealer in Swarthmore a few months ago. When I bought the car, I paid 6% sales tax. Now, a few months later, the dealer sent me a letter and bill stating that since I was a Philly resident, I was supposed to pay 8% sales tax (keep in mind, the dealer is out of Philly) and now I have to pay the remainder. Is that really the case? Philly residents pay Philly tax on out of city car purchases? Any info is appreciated. Thanks!

**thegreattwizz** · 09-26-2012, 06:30 PM

Yes, that is true, the dealer made a mistake.

You pay sales tax based on where you register the car, not where you bought it. Thus, even if you purchased in Delaware, if you register it in Philadelphia, you'd still pay 8%.

IF the dealer is reputable, I'd hold their fee to the fire, as it was their error, not yours; this is even more important if you financed it, as you obviously had budgeted a certain amount for out of pocket expense.

**filmiracle** · 09-27-2012, 08:08 PM

Thanks for the info. I'm fighting them on it but of course I still haven't heard back from them. It was their mistake and they should have caught it when I was there. We signed all of the contracts... so now they're trying to charge me a fee that I never signed/agreed to. In any event, thanks for the info!

**ShoshTrvls** · 09-27-2012, 08:19 PM

Originally Posted by filmiracle

Thanks for the info. I'm fighting them on it but of course I still haven't heard back from them. It was their mistake and they should have caught it when I was there. We signed all of the contracts... so now they're trying to charge me a fee that I never signed/agreed to. In any event, thanks for the info!

Even if you don't pay the dealer, you will owe the tax and the dealer can report the sale (and shortage in tax collected) to Philly. Thus your option may be owing the dealer or owing the city.

**Brooke** · 09-27-2012, 09:05 PM

True, Shosh. You don't owe it to the dealership--you owe it to the City and while the dealership should have known better, it doesn't change the fact that you owed it regardless of which car you bought and from where. I buy my cars out of state because my mom sells them there and it makes sense for me to do so. I get temporary tags until I pay the tax here.

**raider.adam** · 09-28-2012, 09:29 AM

Correct. The retailer that collects sales tax is an agent of the state. They don't pay for it out of their own money.

I would be surprised if they eat it.

**O.H. Lee** · 09-28-2012, 11:03 AM

Like the signs says "I don't charge sales tax, I just collect it".

**PhillyTurboSix** · 10-03-2012, 10:48 PM

Yup. I purchased a truck from north NJ and the salesman said "sucks your from Philly, we have to charge you 8% on top of all this" This city is getting to be a joke. Paying more tax and having to carry a firearm around to be safe just isn't worth it any more. But don't worry. That tax was going to be a "Temporary" tax or so we were told when it went into place like the rest of the taxes. Funny I remember when the casino came to town that was going to lower taxes all over the city. The parking lot of the casino is packed on a daily basis but the taxes have done nothing but go up. Don't get me started!

**NJbound** · 10-04-2012, 07:04 AM

Dude, that was South Jersey!

Anyway... My kid is still looking every time we go by there for your old truck! lol

Originally Posted by PhillyTurboSix

Yup. I purchased a truck from north NJ and the salesman said "sucks your from Philly, we have to charge you 8% on top of all this" This city is getting to be a joke. Paying more tax and having to carry a firearm around to be safe just isn't worth it any more. But don't worry. That tax was going to be a "Temporary" tax or so we were told when it went into place like the rest of the taxes. Funny I remember when the casino came to town that was going to lower taxes all over the city. The parking lot of the casino is packed on a daily basis but the taxes have done nothing but go up. Don't get me started!

**thegreattwizz** · 10-04-2012, 02:56 PM

All of that is true, but deep in the dealer's agreements with the state about being an issuing agent for the Commonwealth REQUIRES their accuracy in assessing, collecting, and remitting the proper tax.

If this were a cash transaction with just a bill of sale, yes, you're entirely on the hook. But, seeing as something like 80%+ of all vehicle transactions are financed, the CONTRACT that encompasses the financing and details the sales tax is the paramount document to the transaction. I'm assuming, possibly incorrectly, that this is the case. That said, sales tax is itemized, and the dealer is required to honor that amount. In theory, you could call the bank, tell them that the dealer is making you pay an additional amount that is different than what is on the finance contract. That should be a last resort.

Again, a reputable dealership should own up to their mistake and cover the difference.

**filmiracle** · 10-05-2012, 09:22 PM

Well, the dealer is eating it... the first person I talked to was very rude, but agreed that I don't have to pay it. They're supposed to be sending me something in writing stating I don't have to pay it (the taxes were already correctly paid by the dealer after I my transactions.) Another person called me and left a voicemail, they were actually polite about it, and again told me it was their mistake and I didn't have to pay. I'm still waiting for that letter in writing... I may have to make another call if I don't get it. Basically, I told them it was their mistake... numerous people could have caught it and we all signed off on the paperwork. Furthermore, I signed and was agreeing to pay the amount on the paperwork... not this new amount. There was even another piece of paperwork that was basically the dealers owes / purchaser owes... that paper said I owed nothing so I told them I owe them nothing.

**PhillyTurboSix** · 10-11-2012, 12:03 AM

Don't be shocked if that dealer turns you into the city and the city sends you a bill for those taxes. Someone is going to pay that's for sure. This city is after every penny and that's a big one they like to collect on!