Why is sales tax charged on a used vehicle purchased from an individual? When a vehicle is purchased new the sales tax is paid on it at that point. If I, as an individual, sell the vehicle later, I do not get a tax credit to use against another vehicle like I do if I trade it in...seems like the states are collecting tax on an object numerous times...this does not happen with other consumer goods like tv's, furniture and the like...so why can they do it on cars?

closed as off-topic by keshlam, Chris W. Rea, JoeTaxpayer Feb 16 '16 at 3:09

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    I'm voting to close this question as off-topic because. the only possible answer to "why" on taxes is "because we live in a socuety, and that's society's consensus as expressed in its laws." – keshlam Feb 16 '16 at 1:51
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    His question is not "why do I have to pay tax?", it is "why does this tax apply to this situation?" I think the question is valid. – Jesse Feb 16 '16 at 3:11
  • But the answer is still "because it seemed kike a good compromise when the law was being considered" -- and you can't get past that without knowing everything ekse tgat was being hoe=rse-readed at the time, the personalities involved, the social context at the time... And if anything, it's a law or economics question, not a personal finance question. Sorry, Offtipic and Opinion. – keshlam Feb 16 '16 at 3:44
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    Because the government wants the money :-) (I'm real tempted to add a 'Duh!' here.) And since vehicles, unlike most things, usually have to be registered when sold, it can collect such a tax without spending more on enforcement than it would collect. – jamesqf Feb 16 '16 at 4:45
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    In addition, some states have exceptions to the sales tax laws for someone running the occasional garage sale, since it would otherwise be a significant paperwork burden for not a lot of money (whether the buyers still technically owe use tax would depend on state law). Selling a car already comes with a bunch of government paperwork, so the tax can be collected more efficiently then for an old sofa. – Zach Lipton Feb 17 '16 at 4:37

It's called a sales tax, not an object tax. The state is taxing your sale of an item. Regardless of how many times a particular object is sold, it is each sale itself that is taxed.

You are supposed to collect sales tax each and every time you make a sale of most objects. If you purchase something and do not pay sales tax, your are supposed to report it to your state and pay use tax. Of course, most people don't actually do this, but that does not make tax go away. Cars are generally more "formalized" transactions involving state registrations, so it is an opportunity for your state to enforce the tax on you, a tax you genuinely owe.

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    True, but it sucks, eh? – Pete B. Feb 16 '16 at 2:12

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