I purchased both cars privately, from residents of Massachusetts. The transactions we conducted both took place in the state of Vermont, since both sellers accommodated me because I didn’t have Vermont plates yet. We dutifully high-tailed it to the Vermont Registry of Motor Vehicles and paid our 6% sales tax on both cars, like good citizens.
Today, the Registry informed me that I owed 5% sales tax on both of those purchases because I purchased the cars from Mass. residents.
Apparently, I was supposed to go to the Mass. RMV (a state that I didn’t live in at the time) and pay 5% sales tax. Then I was supposed to go to the Vermont DMV and try and convince them that since I’d voluntarily paid 5% sales tax in the state of Massachusetts, that I only owed 1% sales tax in Vermont. Yeah. That’d work.
I was told I not only owed sales tax, but I also owed interest for two years, plus an additional penalty for not paying up front. I argued it until I was shaking, but to no avail. If I wanted to register the cars, I had to pay the tax.
In section III, TIR 03-1 states (quite plainly for a government document, by the way):
A taxpayer who has paid sales tax to another U.S. state or territory on purchases of items for use, storage, or other consumption in Massachusetts, is allowed a credit against any Massachusetts use tax otherwise due if (1) the other state or territory allows a corresponding credit with respect to sales or use tax paid to Massachusetts on property brought into the other jurisdiction; (2) a sales or similar tax was actually paid to another reciprocal state or (in some cases) local jurisdiction; and (3) the tax paid to the other jurisdiction was legally due without any right to a refund or credit. See G.L. c. 64I, § 7(c). If the amount paid the other jurisdiction is equal to or greater than 5%, no use tax is owed Massachusetts; where the tax is less than 5%, the tax due is the difference between the amount of Massachusetts use tax that would otherwise be owed and the amount of sales tax already paid. The tax due may not be reduced below zero. Note: There is no corresponding credit available for similar taxes that may have been paid to any foreign country or one of its political subdivisions.
A little further down the document, Vermont is listed as having reciprocity with the state of Massachusetts, plain as day.
Now, not only am I absolutely convinced that I’m right, but I’m also cheap, and I’ve been itching to go on a rant. If I don’t get my $750 bucks in taxes, interest and penalties back, I’m going to waste at least that in the time of the bureaucrats who stole my money.
I’ve contacted my state rep, whose legislative assistant assures me she’ll get back to me in 24 hours. If that turns into a dead end, I was reminded that I once appeared on Susan Warnick’s show as an automotive expert from the Boston Auto Show. I’m not even sure she’s still on television, but if she is, we may have some stuff to talk about.
I can only imagine that others like me have been similarly screwed by the DOR and the RMV. The total over the last 10 years has to run in the millions of dollars. I plan on getting some of that money back. If you’ve been similarly boned, give me a shout.