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Car Tax

A Short Guide to Car Tax

A Short Guide to Car Tax

Car Tax B/g
A car tax is one of the few taxes that are applied in most countries around the world, although the exact method a car tax is applied varies from country to country. Some charge a higher new car tax, while others do not distinguish a new car tax from and older car.
 
DVLA car tax


The DVLA car tax is also known as the Vehicle Excise Tax. The DVLA tax is collected by The Driver and Vehicle Licensing Agency (DVLA), which lends its name to the DVLA tax.
 
Tax disc


A tax disc is the method used in the United Kingdom to determine whether or not a tax disc holder has paid the most recent DVLA car tax in the United Kingdom. A tax disc holder is responsible for attaching a tax disc on the windscreen of each car they own.
 

Motor tax


The Republic of Ireland operates a website to allow individuals to pay their motor tax online. The ability to pay a motor tax online is provided by the Department of the Environment, Heritage, and Local Government.
 

Company car tax


The ability to pay company car tax online in the United Kingdom is provided by The Driver and Vehicle Licensing Agency.
 

Company car leasing
In most countries, company car leasing can provide tax benefits, because there can be lease tax benefits. Most of the company care leasing leas tax benefits are more beneficial to small businesses than large corporations.

Car Tax

Car Tax

What is the Car Tax?
When you are ready to purchase a car, whether new or used, you must be prepared to calculate the required additional costs and taxes that will be added on the agreed upon purchasing price.  Car tax rates and requirements vary by each state, so it is important that you find out the tax rates for your state before purchasing a vehicle.  

How Car Taxes are calculated

Numerous car taxes may be applicable on your purchase depending on certain factors, such as where you purchase your vehicle, which state you register your vehicle, whether it is a new or used vehicle, whether a luxury tax is applicable, and whether tax credits are available for a hybrid vehicle.   

1. General taxes you will be subject to
Almost every state applies a sales tax for the purchase of a car.  These sales taxes may be the same rate as the general sales tax, or may be an explicit rate for car sales.  Most states will apply a sales tax of between 4% to 7%, which will be calculated by the sale price.  While you may not often calculate sales tax in a purchase, this relatively low percentage can become a very large number when purchasing a car.  For example, purchasing a vehicle for $10,000 will result in a $500 tax if the tax rate is just 5%.  

2. Registering with the DMV
The purchaser of the car will always pay the tax and your state’s DMV may even require that you pay such taxes before allowing your vehicle to be registered.  This rule will apply whether you purchase your car from a dealer or from a private party.  Many states, in an effort to thwart underreporting the sales price, will require the tax rate to be based on a blue book value of the vehicle.  
3. Yearly Asset Taxes
Some, but not all states, will also require a yearly car tax on the ownership of a vehicle.  This amount must be calculated before purchasing a car, as residents of these states will be responsible for paying these taxes on their car value every year they own it.  These taxes should be calculated along with your yearly insurance and registration requirements for your state.  

4. Other tax issues.  
Additionally, any new vehicle that is purchased for over $57,180 is subject to a federal luxury car tax that is due immediately upon purchase of the car.  The luxury car tax rate will be determined by the amount over this minimum price.  The luxury car dealer can help you calculate the luxury tax for your vehicle.  Hybrid vehicles also have special tax deductions.  Federal tax credits can be applied to the owner’s income tax as a deduction, up to $3,400 per year.   
Cars have become a necessity for most Americans and it is important that when you make such a purchase you understand all of the taxes and fees that will be applicable.  If you are unsure of how much a vehicle will cost you, speak with a tax and car sales professional in order to assure you purchase a vehicle that fits your needs as well as your budget.  

Paying A Company Car Tax

Paying A Company Car Tax

When paying a company car tax in the United Kingdom, a company can use all of the same resources to pay a car tax online that are available to individuals. The ability to pay a company car tax online is provided through a website operated by The Driver and Vehicle Licensing Agency. 
The Driver and Vehicle Licensing Agency website allows individuals and companies to apply for a new tax disc to prove that the latest Vehicle Excise Duty that has been assessed for the car has been paid.
Since The Driver and Vehicle Licensing Agency made it possible to pay the company car tax online, The Driver and Vehicle Licensing Agency had to adjust the regulations regarding tax discs. Previously, a vehicle with a tax disc that had expired the previous day would subject the disc holder to having to pay a fine immediately. 
However, once it became possible to pay the company car tax, or for that matter any car tax online, the regulations were rewritten to allow five business days after the expiration of the previous tax disc to allow the new disc to travel through the first class post system.

Company Car Leasing

Company Car Leasing

Company car leasing can be a wise business decision for both large corporations and for small businesses. One of the most essential reasons is that when dealing with a lease, tax deductions are abundant. Company car leasing can allow a small business owner to obtain a variety of lease tax write offs.
 
If a business owner logs all the times spent in the leased company car, with particular attention paid to the miles driven, the IRS will allow the small company car leasing discounts that can be written off using either the standard rate, which is determined annually by the Internal Revenue Service, or by deducting the actual cost of the miles. 
In order for a lease tax deduction to be filed based on the actual cost of the miles, the person preparing the company’s taxes will have to determine the business miles driven, and then divide this number by the total miles. This figure must then be multiplied by the total cost of the company car leasing cost. This process can also be performed to determine the proper lease tax write off associated with the lease payments themselves.
Although it is not limited to companies utilizing a company car leasing plan, maintenance, car insurance, and gas may be tax deductible, depending on the percentage of the car’s usage that is devoted to business practices. Therefore, it is important to keep accurate car records.

Motor Tax Explained

Motor Tax Explained

Motor Tax Online is a service that the Department of the Environment, Heritage and Local Government provides over the internet in order to allow residents of Ireland to pay their motor tax over the internet.
According to the Motor Tax Online website, private cars, motorcycles, agricultural tractors, excavators, diggers, combine harvesters, hearse, vehicles that have been modified to be used by individuals with disabilities, some motor caravans, and vintage/veteran vehicles can have their motor tax paid online.
In order to pay the motor tax online, the individuals will need a personal identification number, the vehicle’s identification number, vehicle insurance detail (such as the name of the insurer, policy number, and expiry date), and information related to the payment method that will be used (Visa, MasterCard, Laser, or pre-paid voucher).
The Personal Identification Number, or PIN, needed to pay the motor tax is provided on the renewal/reminder notice that is sent out when the person needs to pay a new motor tax.
Since a system has been instituted in the United Kingdom that assesses a fine if the motor tax is not paid within a month of the previous one expiring, the account will be held in arrears. When paying through the Motor Tax Online site, an individual is permitted to pay as many as three months’ worth of arrears. After three months, the PIN will become invalid, forcing the person to pay their motor tax through a local motor tax office

Using a Tax Disc in the UK

Using a Tax Disc in the UK

 
In the United Kingdom, a tax disc is a paper disc that is displayed on the windscreen or wind shield of a motor vehicle in order to demonstrate that the Vehicle Excise Duty, which is commonly albeit incorrectly known as the road tax, has been paid for that particular vehicle.
The current tax disc holder is not allowed by law to transfer ownership of the tax disc associated with the vehicle in their possession.
Under regulations established by the Driver and Vehicle Licensing Agency, a current tax disc holder can apply to renew their tax disc online or over the phone. This means that a person will be allowed to drive a vehicle with an expired tax disc for five business days, in order to allow time for the new tax disc to arrive through first class post.
In the event an individual decides not to renew a tax disc, they will be automatically charged an 80 pound penalty if they do not purchase a new tax disc within one month after the previous tax disc expires. A tax disc holder also has the alternative to apply for a Statutory Off- Road Notification if they will not be driving the vehicle on public roads. 
However, in the event an individual drives a vehicle bearing a Statutory Off- Road Notification on a public road, they will be subject to the same punishments as if they were driving a vehicle without a tax disc.  
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