I bought a car in Des Moines in December and payed the sales tax on it when I registered my car in Arizona in January. I thought it was weird.
Any Iowa residents bought a vehicle outside the state?
- Thread starter UNIGuy4Cy
- Start date
That is correct, I lived close to the border most of my life and bought many vehicles out of state. In state the dealer usually handles all the taxes and licensing. Out of state they can't. So you go to your county court house and register the vehicle, pay all the taxes and registration fees.
One thing I noticed someone on here say, is that the county takes your word for it. That used to be the case, both in private sales and in out of state sales.
This has changed in the last couple years. Most if not all, now require a bill of sale. If it is a private sale, a hand written bill of sale is fine as long as it includes the sale amount and signature of the previous owner.
None of this is a big deal as long as you know about it before hand, and understand it. Obviously it requires a trip to your local court house, which used to be a normal thing anyway to get your registration renewed.
One thing I noticed someone on here say, is that the county takes your word for it. That used to be the case, both in private sales and in out of state sales.
This has changed in the last couple years. Most if not all, now require a bill of sale. If it is a private sale, a hand written bill of sale is fine as long as it includes the sale amount and signature of the previous owner.
None of this is a big deal as long as you know about it before hand, and understand it. Obviously it requires a trip to your local court house, which used to be a normal thing anyway to get your registration renewed.
Certainly not germane to the conversation, but in Arizona you do not pay sales tax on a used car sold in a private party sale. Saved me a chunk of change on my last car, and also brings up the point....why are taxes incurred every time a car is sold? Two identical cars, one that is kept for 10 years as a one owner car, another that gets sold three times in the 10 years. Why has Car B generated $8,000 of tax revenue while Car A only generated $2,500? It's the same chunk of property. That angers me.
Unless you trade it in, then it is just the trade amount that you pay. I think they should give you 30 days or so to private sell your car afterwards, or pre sell your car for a couple months before and subtract that amount off at least. Or only make you pay sales tax on a new car.
When I bought a car in Minnesota, they ****** up where they sent the title. I still have no idea where the original title to the car went but after about 8 months they finally had a duplicate title sent to the court house and I could claim my iowa state plates that were sitting in the court house for 6 months. They weren't even going to take the plates off the car I traded in. I guess that isn't a thing in Minnesota. They looked at me weird when I asked for my old plates. The dealership isn't that far from Iowa and I can't be the first Iowan to trade a car there.
I will think twice before buying a vehicle again in Minnesota and definitely won't return to the dealership I bought the car from. It was a massive headache trying to rectify the title situation.
I will think twice before buying a vehicle again in Minnesota and definitely won't return to the dealership I bought the car from. It was a massive headache trying to rectify the title situation.
I think you will prefer sales tax to the alternative. In Virginia, cars are taxed as property. You pay an annual tax based on the value of your car each year.
In Arizona, I also pay property tax annually on my cars. It's called Vehicle License Tax (VLT) here, but it's the same thing.
How is that different than a registration fee that we pay in Iowa, which is also based on original price and weight? Just as an example, my a little higher than average priced SUV runs something like $500/year and stays that way for at least a decade even though the value of your car goes down.
exactly. $198/year for my wifes 7 year old car here in Nebraska. WAS $95 at 2 years old in Kentucky!
Yeesh - I forgot how expensive Iowa's license plate renewals are. South Dakota is pretty cheap. Our pilot is $108/year until it hits 10 years old and our CRV is $72/year until it is 10 years old. I bought my pilot in Nebraska and paid the sales tax in South Dakota when I registered it. They messed up the order on the title paperwork though so we had to do some weird convoluted "transfer" to get it titled correctly.
My wife has a friend who sold a car on Craigslist and the guy paid more to leave the plates on, so she did.
Some time later she got a call from somebody up in Canada about blown tolls and a bunch of other things with her plate on it. I think the situation got rectified in the end, but I'm with you, I want my plates back!
My son bought a car in Minnesota last year and had a similar problem. The said it was something to do with Iowa requires the original title while Minnesota doesn't. The car came through an auction from New Hampshire originally. The problem eventually got resolved. I wouldn't be afraid to buy a vehicle from Minnesota but I would ask some questions about whether they are familiar with Iowa's title requirements.
Never, never, never surrender your plates to a buyer, even if it's a dealer. The plates belong to you, not the car.
I think in Minnesota, unless you have personalized plates, the plates stay with the car. I don't know exactly how it works or why they function this way but that's what I was told.
Buy the car, pay sales tax and use a friend's address in the state you want to pay sales tax in. Your license plate will be from that state, however. Is it legal.......no...... will you ever get caught, no.
Friends might ask you why u don't have Iowa plates. Speaking of taxes - from my experience, Iowa's taxes on cars is outrageous until about year seven.
Here is a nice clear explanation agreeing with what everyone is saying (or has in past years! 
It seemed odd to me when I got a car in MN, but cars are just taxed differently and other differences at state-level. (e.g. in MN the plates go with the vehicle not with owner as in Iowa.)
tax.iowa.gov
Iowa One-Time Registration Fee (formerly called Motor Vehicle Use/Lease Tax)
Description: The sales or lease price of vehicles subject to registration is exempt from sales tax. These vehicles are subject to a one-time registration fee equal to 5% of the sales or lease price. This one-time registration fee also applies when vehicles are sold between private individuals.
One-Time Registration Fee: 5% of the sales or lease price
Distribution of Funds: Road Use Tax Fund
Motor vehicle one-time registration fee exemption information and worksheets
It seemed odd to me when I got a car in MN, but cars are just taxed differently and other differences at state-level. (e.g. in MN the plates go with the vehicle not with owner as in Iowa.)Iowa Tax/Fee Descriptions and Rates | Iowa Dept. of Revenue
Read about the different types of individual and business tax and the current tax rates for each in Iowa. Read our common questions for more support.
Iowa One-Time Registration Fee (formerly called Motor Vehicle Use/Lease Tax)
Description: The sales or lease price of vehicles subject to registration is exempt from sales tax. These vehicles are subject to a one-time registration fee equal to 5% of the sales or lease price. This one-time registration fee also applies when vehicles are sold between private individuals.
One-Time Registration Fee: 5% of the sales or lease price
Distribution of Funds: Road Use Tax Fund
Motor vehicle one-time registration fee exemption information and worksheets
I've bought in MN, IL, WA, FL, IA and WI. Its state by state. California for example you will pay Cali tax and then again in Iowa. Wisconsin on the other hand was no tax until I went to license it in Iowa. If I remember right (It was 2003 after all) I didnt pay tax in Minnesota.
Its not a law. You only turn the plates in if you want a refund on your remaining months of registration