>So it's time to pay the ad valorem taxes on my cars, but I received a
>notice to call the local tax commissioner to compute the tax on my TR6.
>I try to call them.six times before I have the privilege of being put on
>hold for 35 minutes. Finally, a voice appears on the other end and asks
>me "what did you pay for your car?" Without thinking too much and being
>basically honest, I replied "5,000 dollars" (which isn't exactly right
>either) and was promptly told my bill was $107.04. I'm still trying to
>figure out the answers to two questions: one, what do they do will all
>the tax money and two, why I didn't reply "oh, maybe a thousand."
I'm not quite sure what we're talking about here. It sounds to me like a
personal property tax similar to the real property tax which you pay on
your home, condo, mansion, vacation property, etc. Many states have done
away with their personal property taxes because of the difficulty of
administration. For example, is that picture over your mantel an original
Jackson Pollock or the oil drippings from a Triumph Roadster. Another
possibility is that it is the vehicle's annual registration fee, all or a
portion of which is computed as a personal property tax. The good news in
either of these cases is that the amount you pay (in personal property tax)
is deductible on the federal income tax. If you had, for example, replied
"one thousand" there is little likelihood that the tax authorities could
have contested the case (or wanted to do for some portion of $107.04) but
had you reported that your 2002 BMW 740 cost $1,000 then they would likely
have charged you whatever their Blue Book said it sold for. Finally, as to
what the money is used for, you first need to know who is collecting the
tax, state, city, school district, or some combination of them.
-- Andy
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