Excise tax insanity at the DMV... More than the cost of the vehicle!

Submitted by abovethe_clouds t3_10er07v in washingtondc

I just bought an old Ford pickup for dump runs, going to Lowe's, etc. A 1972 Ford F-100 to be exact. I paid $2600 for it. It's rusty, crusty, and needs some fixing up. My plan was to register it historic. Based on an insanely high NADA valuation, the DC DMV has determined that the excise tax I need to pay in order to register the truck is... $2,639.00!!! More than the cost of the truck!!

I spoke with a supervisor and they said there is nothing they can do.

Has anyone dealt with a similar issue before? As it stands now, I can't afford to register it!

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buxtonOJ t1_j4untx1 wrote

Just print some temp tags, seems to work fine around here

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flordecalabaza t1_j4skxhl wrote

I read the regulation (18 DCMR 401.16) and there is no exception to using the NADA valuation in the calculation.

The only thing I could think of is if there is a way to get a different nada valuation based on the poor condition of the vehicle and use that in the calculation?

I don’t know about how nada valuations work so not sure if you can get a different book value based on condition somehow.

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fissionpowered t1_j4staav wrote

IANAL...

What about the following sentence "If the NADA guide does not provide the fair market value for a particular vehicle, the applicable bill of sale shall be used."

That could be interpreted as covering cases such as this, couldn't it?

I mean, any reasonable person should recognize that the "book" value for 50 year old classic cars probably rarely matches the value of a particular example.

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abovethe_clouds OP t1_j4te75m wrote

It could certainly be interpreted as such. I imagine they will say that's for instances in which a vehicle is so obscure that a NADA value doesn't exist. That's how I read it. I agree that it's worth a shot.

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fissionpowered t1_j4uqpkd wrote

Someone might say that, but the NADA guide is quite exhaustive, covering basically all cars dating back to 1926.

I would be somewhat surprised if there is a single car registered in DC that doesn't have a published NADA book value.

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MidnightSlinks t1_j4tsj53 wrote

>If the NADA guide does not provide the fair market value for a particular vehicle

That means "if the fair market value is missing from NADA for a particular vehicle," not "if the value provided for a particular vehicle in NADA is not reflective of fair market value."

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fissionpowered t1_j4uqbsc wrote

Is that settled law?

On its face, I don't think it's clear that that is the only interpretation.

It would be worth reaching out to whomever has the authority to make that sort of legal interpretation in the DC system. That will not be the DMV customer service people.

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paulHarkonen t1_j4vgvm8 wrote

OP can certainly try, but the plain reading of the text certainly points toward the interpretation that it only applies for items that don't have a value in "the book".

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abovethe_clouds OP t1_j4ssrau wrote

I read the same regulation. The DMV website specifies "fair market value" but doesn't specify what specific condition they choose. The woman at the service center told me today it's done automatically.

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Oaktownbeeast t1_j4syi0i wrote

Try going to a different DMV and talking to a different person. I've rarely had a consistent experience when it comes to DMV staffers. It's a pain but it's worth a shot.

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abovethe_clouds OP t1_j4t3i68 wrote

Thanks, that's my plan at the moment.

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trilliankqa t1_j4uq3jl wrote

Go to benning road. I got escorted out of the M st location for this same argument.

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amsterdan87 t1_j4xr475 wrote

Not a lawyer, but for the purpose of a property tax assessment, DC recognizes the actual sale price in an arms length transaction within the past year as the property's appropriate fair market value.

Take it to court if you have to. If the FMV was more than what you paid for it, the seller would not have sold it to you for that price.

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neil_va t1_j4v4ac0 wrote

Are you sure? When I bought my car in 2008 I was able to provide a signed bill of sale price that they honored. I remember because it was a good $3000 below NADA

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ghostella t1_j4sri0v wrote

The top tax rate is 10.1%. Don't know anything about old trucks but NADA values this truck at least for $26k?? And you got it for $2600?

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fissionpowered t1_j4ssh27 wrote

Just checked NADA prices, and yep, the median resale of a '72 F-100 is $26k.

That, obviously, represents mostly restored vehicles.

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DCTom t1_j4xxknv wrote

😳$26k for an old beater truck?!

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thepulloutmethod t1_j4yuypu wrote

They're collectors items at this point. It's not easy to get your hands on a pickup with bench seats and a stick shift nowadays.

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abovethe_clouds OP t1_j4ssd8t wrote

The values are wildly inflated. I have no idea why. This truck in nice condition regularly sells for between $7000 and $15000. Mine is pretty rusty, and needs some mechanical work. $26000 would be for a high-quality restoration.

I got a decent deal, but the absolute most I think I would be able to resell mine for is $4000 on a VERY good day.

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ghostella t1_j4uz5a5 wrote

There has to be a way to appeal the value right?

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flordecalabaza t1_j4ssldu wrote

Looks like the book value is 20-60k although you can find jacked up ones selling for half that. With a working engine 2.6 is a pretty big steal though.

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abovethe_clouds OP t1_j4tdwzz wrote

I was looking on Craigslist and Facebook marketplace for a month or so before buying this one. I would regularly find running trucks for less than $4000. Honestly, if they told me the value was anything less than $10,000, I'd be pretty annoyed, but pay. But, more than I paid for the truck is insane.

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ngfdsa t1_j4tiqwi wrote

Moved to DC after graduating college, my dad was getting a new car and was going to give me his old one. The lady at the DC DMV told us to go to a different state (happened to be NY) to transfer the title because DC would make you pay taxes on the value of the car even if it isn't sold for anything

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9throwaway2 t1_j4v687i wrote

huh? family transfers (parent to kid for example) are excise-tax free.

how do I know? I've done this myself. took 10 min at the Georgetown DMV and they didn't ask any extra questions.

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SabbathRulez t1_j4w47k0 wrote

If the car is registered in someone else's name in another state, you have to pay the excise tax when you register it in DC if the name on the title is changing. It doesn't matter if it's a family member. The family member tax exemption only applies when it's changing ownership between two DC residents.

If the car is already in your name when you register it in DC, you don't pay the excise tax.

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9throwaway2 t1_j4w57dm wrote

gotcha, i guess the guy at the DMV was being extra nice that day

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ngfdsa t1_j4v6c22 wrote

No idea, I went to the same DMV and this is what they told me

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SonofSonofSpock t1_j4vh6uu wrote

I thought the excise tax was based based on the vehicles weight/MPG which could be why yours is so expensive. Am I thinking of something else?

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abovethe_clouds OP t1_j4vm467 wrote

The calculation is (Fair Market Value) X (Weight/MPG chart)

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SonofSonofSpock t1_j4vnrv9 wrote

Oh right, I did the math a month ago when we put a deposit on a new hybrid (still waiting Hyundai...).

I forgot the formula while reading your post (since the FMV for a new vehicle is set) since at the time I was mostly focused on the weight and MPG of the vehicle we are going with.

I think your avenue is to try and discuss the FMV with a supervisor as that is possibly negotiable, the weight/mpg is likely written in stone. Maybe reach out to your council person?

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tinyhorseinthecity t1_j4xhf45 wrote

Call your council member. Won't be the first time they had to navigate a poorly worded statue/bad external policy peg, won't be the last

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abovethe_clouds OP t1_j4xpary wrote

I should’ve mentioned, that’s the first thing I did when I got home. I reached out to constituent services as a first resort, she agreed that the situation seemed wrong and looped in the DMV director’s office. We’ll see what happens.

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tinyhorseinthecity t1_j4xqtrr wrote

Oh good! Fingers crossed. It's either fucked up on purpose or fucked up on accident, either way they should hear about it.

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pg-97 t1_j5fdzm8 wrote

The stupidly frustrating part about it the dmv doesn't even allow you to find this info before you even go to dmv. You fill out all the paper work only to wait for someone to tell you a amount that only they have access to. Stupid system.

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hoopadinga t1_j4vbi3b wrote

It's why I keep my '48 Mercury convertible registered in New York. When I got it, I showed the bill of sale and paid the 4% plus local because I wanted regular plates. It's parked in a garage, so D.C. doesn't really say much about what they don't see. I drive it up to NY enough that I usually can get it inspected. If not, New York does allow you to go late if the car is out of state when inspection's due. It's registered to a relative's address.

I asked about registering it in D.C. and like OP says, they go on the NADA value. Mine is close to it, so I'd pay a lot. They don't make any allowance for it being a basket case. or a rust bucket. I had a friend who bought a '64 Caddy rust bucket and they wanted thousands of dollars to register it with regular plates. He got WVA plates, instead.

D.C.'s pretty bad about it and totally not flexible.

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hotchips97 t1_j4vcapu wrote

Maybe come down to VA/MD and just register it as historic/antique

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abovethe_clouds OP t1_j4vm6t7 wrote

If I could register there without being a resident, I would consider it.

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hotchips97 t1_j4vn9ii wrote

I believe for VA you need a VA residential address. Vermont is a state where you can live out of state and register a car. You can actually do it over mail and get your title and plates in the mail. It’s a common loophole to register a car with a missing title. Hypothetically you can register your truck there without being a resident. Look further into Vermont state registration

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abovethe_clouds OP t1_j4vnhcc wrote

That’s a good suggestion, but VT also uses the NADA Value. I’ll look for an exception, but haven’t found one yet.

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hotchips97 t1_j4vp4yd wrote

Interesting, just looked it up. Looks like Vermont charges tax regardless of age of the vehicle on the NADA value unless you can get an exception. I would try and explore the MD/VA route using a friends address or something. 2,600 is a lot to pay in tax for an old unrestored truck. In VA antique tags will cost you like $50 and they have lifetime validity (no yearly registration or inspections)

In VA the minimum tax you pay when you get your title in $75

Edit: The truck is 50 years old, I feel the govt has already got it’s fair share of taxes out of it

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18_USC_1001 t1_j4wq71i wrote

What about Montana?

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abovethe_clouds OP t1_j4wsxyr wrote

Montana requires, as I understand, you to set up an LLC, and the cheapest service appears to be around $850. South Dakota appears to offer a similar option for around $500. Vermont allows for a dealer to appraise the car, but that requires bringing it to Vermont. At the end of the day, I want to register in DC, and pay the tax to the city I live in, but not if it's the crazy figure I've been given.

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Rscaroll t1_j4xtdvt wrote

On the flip side, when it gets stolen your insurance company will have no other option than to cut you a nice check.

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abovethe_clouds OP t1_j4xu609 wrote

What’s interesting is that my insurance premium didn’t go up very much. I feel like they’re looking at a different value, and there’s no way I’d get anything close to the NADA value if it got totaled or stolen.

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motorcycle_60 t1_j4yeym0 wrote

Here's an idea find a state with low registration fees get a p.o. box in said state register it using p.o. box address in said state. Close p.o. box or ask for change of address form. In Ohio change of address packet includes many coupons. Most of them I didn't use but in there is like Lowe's and home depot coupons in the packet. If I remember right it was either free or small fee like $7.

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posam t1_j4ylotr wrote

Tax aside, historic vehicle tags in DC basically prevent the vehicle from being used in practice.

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abovethe_clouds OP t1_j4ym7p4 wrote

Not really. There are two classes of historic vehicles. One is just for parades and events, the other just limits you to 1000 miles annually. I’d do the latter, and have no intention of exceeding that limit.

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abovethe_clouds OP t1_j50som0 wrote

So far, the only response I have received from my ward’s constituent services director is an email from the DMV Director essentially saying that the bill I was given is correct, and there is no flexibility. He specified that the reading of the code is that a bill of sale is only used when a NADA value does not exist.

For additional context, the NADA value only tracks dealer sales, not private sales. Insane that private sales are taxed via an inherently unrepresentative guide, while not receiving any of the benefits of purchasing from a dealer (warrany, etc).

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