Texas Registration? "Traded" or "Bought for $"?

I'm thinking of trading my car for another one; even swap, and I'm trying to figure out tax wise if it's cheaper to tell the DMV that it was an even trade or that I bought it for really cheap. I don't remember what the taxes are on trades. Anybody have any info on this Thanks, Shawn

 

Alot of things have changed over at the DMV, the way you title vehicles, their value system, etc.

If im not mistaken, the DMV is using a new value system for cars, they have changed the way cars are valued now, there is no "I bought this car for 100 Bux" deal. They have a website they go into and find that vehicles "true" value and just hammer you with the taxes on that. Its something to looking to though.

As far as straight trade, Im not too sure, I know the "gifting" procedure has changed.

 

Use to be, and probably still is, that when trading in a vehicle that vehicles value was deducted from the one being bought. "Even trade" nullified the values. Seems like there was a small tax to pay, sort of like the gifting deal.

 

I haven't bought or traded a car in texas in about 30 years. So what I'm going to say probably has no bearing on what you are going to do.

Up here when you trade even up and are not liable for taxes it raises red flags and can sometimes lead to a big ordeal at the DMV. We have a minumim value for tax purposes like about 250.00 here. So what we do is pad that a little and pay a token sales tax. No hastles at the DMV that way.

That's just what we do here.

 

Last summer, I swapped vehicles with my daughter, even trade. No tax. But that's Arkansas, not Texas.

 

You can do that here too, but it's because they're family.

 

Vintage and classics are exempt from Texas's valuation base, Thank God!
Gift is the way to go if the vehicle is not exempted, IMO. It will still be based on a percentage of "market Value".
TXDOT is hard to keep up with; even the counter clerks are often wrong. I usually research on line, but even that is not always current. They have now dis-allowed YOM tags such as dealer, farm truck, -any tag that originally "limit(ed) usage" in their words. Thus I can no longer use a YOM dealer tag to avoid having a front plate, although "Antique" registration utilizes a single rear plate.
Paul

 

I just looked it up; even trades are still exempt from "presumed valuation", so that appears to be the way to go regardless of age.
Paul

 

I have in my hand a current application for Texas title.
Form-130-U
Section 21 sales and use tax computation
It states:$5 even trade tax.
So, If it is an even trade, The tax will be $5.00.
But the vehicle you trade has to be titled in your name.

 

The car I'm talking about is my Shoebox in my avatar. And, yes the clear title is in my name. I like the $5 deal That sounds like the best way to go. Thanks for the info fellas.

 

Don't forget to take that 130-U form with you and get it signed by the seller/trader. They'll boot you right out of the window at the DMV without that thing. Scribbling a bill of sale on a napkin doesn't fly anymore; learned that the hard way.

 

Ok, will do.

 

http://www.txdmv.gov/vehicles/titles/std_presumptive_value.htm Pretty well gives the straight scoop. The main thing is to have all of your ducks in a row if you do do a trade and I would go so far as making up a statement of trade for each party and having it notarized or both of you go to the courthouse together and get the transfers done then and there.

 

I did a trade a few month ago, but had a bad title. It wasn't in the previous owners ame. I had the title in hand, but they made me get a bonded title, then I had to pay tax on the car like I had bought it. Kinda a scam if you ask me. I had a bill of sale saying it was traded. Ended up costing me about $900 to get the vehicle titled and tagged. Lesson learned about titles! Damn that $5 trade sounds good!