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Old 01-23-2010, 04:00 PM   #1
moneymaker
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Just Purchased a BMW - Sales Tax Inquiry

Hey,

I live in Scarborough and I'm getting an e36 on Monday. Im going to the MTO office on Monday to get it registered, plated etc. Im buying this car privately and understand that I have to pay a retail sales tax of 8% on either the purchase price or the vehicle's wholesale value, whichever is more.

Heres the thing. The wholesale value listed on the Used Vehicle Package for this car is $2900. Im actually paying $6000 for the car as its in mint condition and mechanically sound.

How much should I tell the MTO I purchased it for? If I say I payed something near the wholesale value I'll be saving myself a few hundred dollars in taxes. Does the MTO investigate or ask for proof of the purchase amount? I know theres the Bill of Sale but can't I write a lower amount, and pay the seller the real price? I'm hoping the MTO just goes by the amount listed on the Bill of Sale.

This is my first time buying a car so any help is much appreciated.

Thanks
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Old 01-23-2010, 05:04 PM   #2
Deep 3.2TL
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They will go by the amount on the bill of sale or wholesale, which ever is greater. Get the seller to write it at $2500 and they will charge you at $2900.

They don't have the time to "investigate"...
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Old 01-23-2010, 05:12 PM   #3
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^ exactly
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Old 01-23-2010, 06:16 PM   #4
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Old 01-23-2010, 07:21 PM   #5
moneymaker
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Excellent. If they don't have time to investigate then ill just get the seller to write it at $2500. I just wanted to make sure. Thanks for the help guys.
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Old 01-23-2010, 08:42 PM   #6
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Just make sure you get a bill of sale for the actual amount just in case.
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Old 01-23-2010, 10:48 PM   #7
moneymaker
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Just make sure you get a bill of sale for the actual amount just in case.
Why would I need another Bill of Sale for the actual amount?
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Old 01-23-2010, 11:03 PM   #8
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Why would I need another Bill of Sale for the actual amount?
Just to have a record of the actual transaction, I did that for both of the cars I bought.
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Old 01-23-2010, 11:16 PM   #9
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Why not do the honest thing and pay on the full amount like I did and other honest people do, pay your taxes.
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Old 01-24-2010, 12:23 AM   #10
Deep 3.2TL
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^^^ Yea ok... Like we don't pay enough already... That car HAD TAXES PAID ON IT ALREADY. You don't have to pay taxes on ANYTHING else you buy second hand...
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Old 01-24-2010, 12:24 AM   #11
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They will look on the bill of sale on the UVIP. Whatever the seller writes down the MTO will look at the amt and take the greater of the two. As Blackedout95 says, pay it and you won't have to worry about any future issues.
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Old 01-24-2010, 12:27 AM   #12
Deep 3.2TL
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^^^ Tell me one reason why the buyer needs the right amount on the bill of sale in a private sale? There are no warranties, etc. There's no taking it back...
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Old 01-24-2010, 12:45 AM   #13
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Just make sure you and the seller agree on the amount shown to the MTO for the taxes paid just in case they "investigate" either of you.
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Old 01-24-2010, 10:25 AM   #14
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They won't investigate anything, and I think the same way as 3.2TL, you don't pay taxes when you buy something on Kijiji, why should you do it for used cars? And the higher amount rule is just pure bullshit, I think that's the only time where you can pay taxes on money that never even changed hands. When you buy something on sale in a store (same idea really) you pay taxes on the discounted amount, even if it is below wholesale value. This whole used car tax system is just another cash grab.

The MTO bill of sale is used for tax reasons, a private bill of sale is for peace of mind.
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Old 01-24-2010, 12:44 PM   #15
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They won't investigate anything, and I think the same way as 3.2TL, you don't pay taxes when you buy something on Kijiji, why should you do it for used cars? And the higher amount rule is just pure bullshit, I think that's the only time where you can pay taxes on money that never even changed hands. When you buy something on sale in a store (same idea really) you pay taxes on the discounted amount, even if it is below wholesale value. This whole used car tax system is just another cash grab.

The MTO bill of sale is used for tax reasons, a private bill of sale is for peace of mind.
It isnt about comparisons, its a tax law. If the country were to take up your mentality you would stop paying tax on several things in daily life, why stop at a resale car?

If the law became taxation on jelly beans on kijiji, its a law. When you evade these taxes it only shifts the tax burden on honest citizens more so. Nothing to be proud of at all.
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