Monday, August 24, 2009

Reason Number 14,241...

...that I hate Michigan.

We got a call the other day from the car dealership that I needed to stop by. So today I did, and I found out that there had been a bit of an issue with the title to the Kia when I traded it in.

See, when I got divorced two years ago, I got the Kia financed in just my name as it had been financed in both of our names. The lady at the bank when I refinanced it said that I would get the new title in just my name in the mail. Well, about a week later I got a title, but it was the same one that I had before, only with some new stamps on it. I didn't really think much of it. I figured that the title was fine because my ex had signed off on it, the bank had released the original lien, and I was listed as the owner with a stamp from the bank as the new lien holder. So I figured that everything with it was absolutely fine.

When I was at the dealership buying the Ford, they also thought that everything would be fine. They told me that they would call me if there were any troubles. Well, apparently something happened and they couldn't get the title transferred, so they called. I went today to get the situation taken care of. They initially wanted me to file for a lost title, but that would have required me to get my ex's signature, which really wasn't an option. So I offered to take the title down to the Secretary of State and just get everything squared away there. They told me it would cost $15 to get the title changed around and then just have it mailed to them and they'd get everything all set.

So I headed over to the SoS, which is always a pain anyways. I get there and I'm number 49...they're on number 18. Luckily that went pretty quickly. I only waited about 20 minutes or so, maybe 25, but either way it wasn't very bad. Then I go to the counter and explain the situation. The lady tells me that it's going to be $15 for the title...$20 if I want one printed right then. She then asks me who the person that is signing off on the title is, and I tell her it's my ex. She then asks if I have the copy of the divorce decree that states that I get the Kia. I tell her no, and she then tells me that I have to pay 3% sales tax to get the car titled in just my name. Apparently whenever you are taking a name off of a title, you have to pay sales tax on the fair market value of the car. Of course, I didn't have a copy of the divorce decree with me...and even if I did, it wouldn't help. See, when we got divorced, we worked everything out before any paperwork was filed and the car was given to me effectively before the divorce occurred, so the divorce decree wouldn't have shown that I was given the car in the divorce anyways.

So she asks me what the fair market value of the car is, and I tell her $1,000. I figure if I'm going to have to pay tax on an item that I've already paid tax on, I'm not going to pay much tax. She then explains that she can enter whatever I tell her for tax purposes, but if the state decides to audit the transaction they will charge 175% of the amount that they determine is the tax based on their determination. So I then decided that the fair market value of the car would be $2500, which resulted in a tax payment due of $75.

So I paid the $75 and the $20 to get a title printed out right there. I then ran that over to the dealership and signed off on it so that the whole situation could be over with.

I'm really, REALLY upset that I had to pay $75 sales tax on a vehicle that I paid $600 sales tax on when I first bought it. I don't really understand how the state can get away with something like this. It's basically taxing someone twice for the same thing, which is absolutely ridiculous to me.

I guess I'm just going to chalk it up to another reason to hate this godforsaken state. I have to admit that I was VERY rude to the lady working there after she explained all of this to me. I know it's not her fault, but she knowning works for an entity that is basically in charge of legally ripping off normal people.

1 comment:

Doug said...

I don't think it's Michigan's fault...
Divorce (ex's) and taxes seem to universally hated everywhere...