Paying Dealer's Taxes in Oregon! Buyer's beware!

[pjsview]

We were considering a purchase of a motorhome in Oregon and the dealer was going to charge us for the Oregon CAT tax in addition to our state sales tax. This is ridicuous! It's like charging a home buyer/seller for the agents state tax due on the commission. The follow is off the internet about this CAT tax:

Who must pay Oregon CAT tax?
The CAT is applied to taxable Oregon commercial activity in excess of $1 million. The tax is computed as $250 plus 0.57 percent of taxable Oregon commercial activity of more than $1 million. Only taxpayers with more than $1 million of taxable Oregon commercial activity will have a payment obligation.

It is clearly the responsibility of the dealer to pay! No way are we ever okay with that! Buyer beware!

[1JetDoc]

Originally Posted by pjsview

We were considering a purchase of a motorhome in Oregon and the dealer was going to charge us for the Oregon CAT tax in addition to our state sales tax. This is ridicuous! It's like charging a home buyer/seller for the agents state tax due on the commission. The follow is off the internet about this CAT tax:

Who must pay Oregon CAT tax?
The CAT is applied to taxable Oregon commercial activity in excess of $1 million. The tax is computed as $250 plus 0.57 percent of taxable Oregon commercial activity of more than $1 million. Only taxpayers with more than $1 million of taxable Oregon commercial activity will have a payment obligation.

It is clearly the responsibility of the dealer to pay! No way are we ever okay with that! Buyer beware!

It's quite obvious that just like corporations, dealers do not actually pay taxes! They just bump up their sale prices to cover whatever the state or federal government is asking them to pay and pass that on to the customer.

There are plenty of RV dealers in other states that do not have this tax. Maybe you should expand your shopping area.

[Kid Gloves]

One way or another, a company is going to charge its customers prices which cover all operating expenses plus a profit margin. While it may have been distasteful to see a line item charge for a specific business expense, we’re all paying for it in some fashion.

You said the dealer “was going to charge...” Were they willing to drop the charge once it was brought to their attention? It isn’t uncommon to go over a bill and question a prep fee or a transaction fee as part of the negotiation process.

[Dutch Star Don]

It's no different than being charged for shop towels, lubricants and disposal of chemical waste or debris, like tires or oil. They have to figure all of that into their daily working expenses and it gets passed onto the buyer.

[bdpreece]

You pay it one way or another. It can be in the selling price or as an add on later. This way they advertise a lower selling price then add the tax in later. Makes the buyer think they are getting a good deal. You just need to always get the lowest out the door price and go from there.

[corn18]

If the additional cost contributes to a price that is higher than the market price, then people will go elsewhere and that company/dealer will go out of business.

Not sure why that business would list it as a separate line item. Kindof like the irritation of seeing a "destination charge" on all new autos. Or the silly documentation fee. Just give me a final price. Maybe that dealer likes to give a low ball price that suckers you in and then adds 10% to that price with stupid add ons/fees.

You would be really irritated if you ever saw the Bill Of Materials (BOM) cost vs. the selling price for commercial items. The company I ran made a product that cost $75-$85 in material. Final MSRP @ the retail store was $499-$999. Cost about the same to make the $999 version vs. the $499 version. Our net margins were about 20%. Costs a lot to run a company. And the distribution network ate up a minimum of 35% of the MSRP.

[vyndance]

0.57% of $100,000 is $570. For 600 bucks or what ever your buying you are going to walk on a deal? Welcome to the forum.

[hohenwald48]

Originally Posted by vyndance

0.57% of $100,000 is $570. For 600 bucks or what ever your buying you are going to walk on a deal? Welcome to the forum.

Likely not the $600 but having to deal with what the OP considers an unscrupulous dealer for the life of the RV warranty.

[pjsview]

The dealer hid the $1400 CAT in the taxes, it was not clear until I asked about the tax amount charged. I don't agree that this tax is like "shop towels". It is a corporate tax that dealers are charging buyers in Oregon. We walked.

[inthepines]

Originally Posted by pjsview

The dealer hid the $1400 CAT in the taxes, it was not clear until I asked about the tax amount charged. I don't agree that this tax is like "shop towels". It is a corporate tax that dealers are charging buyers in Oregon. We walked.

I don't blame you.
Most people don't pay the sellers real estate agents commission or the taxes they pay on that commission.

[avid108]

Originally Posted by vyndance

0.57% of $100,000 is $570. For 600 bucks or what ever your buying you are going to walk on a deal? Welcome to the forum.

I know I would. I have gotten up to walk out on a truck deal over $140 in doc fees after a couple days of negotiation over price. By the time I was done, you could see every vein in the manager’s head and neck. He was extremely red-faced, but I got the truck at the price I wanted and didn’t pay doc fees.

It isn’t easy to talk me out of my money, and I will negotiate over absolutely everything. I never regret walking away from a deal and keeping my money for another day.

[tetranz]

I can see both sides to this. Of course it's true that the customer ultimately pays for everything whether it's listed on the invoice or not. The only number that really matters is the final amount you have to pay. That applies to trade-ins, sales tax or anything.

But ... if there was a clear understanding that the price was $X and then the final invoice has One RV at $X and dealer tax of $1400 then, I agree, that doesn't seem quite right.

Although from here: https://www.oregon.gov/dor/programs/...use-taxes.aspx

Originally Posted by State of Oregon

If you purchase a taxable vehicle from an Oregon dealer, the dealer is responsible for the tax but may pass on the amount to you. If this is the case it will be itemized on your purchase documents.

It sounds like the sales person should have either mentioned this earlier or not listed it on the invoice but built it into the final price he was prepared to sell for.

[TXiceman]

The dealers love people that do not read the charges on the contract. They will try to sneak in these bogus charges which most people do not catch. These charges will translate to bottom-line profit for the dealer.....money in his pocket.

I walked out of a deal for a car that the dealer tried to sneak in two protectant packages. He stated that they were already on the car and were required as part of the contract. I reached across the desk, grabbed the handwritten contract and deposit check and told him the deal was off and ripped them to pieces and I went out the door.

Ken

[Kid Gloves]

Originally Posted by pjsview

The dealer hid the $1400 CAT in the taxes, it was not clear until I asked about the tax amount charged. I don't agree that this tax is like "shop towels". It is a corporate tax that dealers are charging buyers in Oregon. We walked.

What other taxes were being charged in the “taxes” line? Oregon has a New Vehicle Privilege tax of .5% that is imposed on certain vehicles. Otherwise, there is no sales tax on vehicles. The NVP tax should not have been charged if the vehicle was not going to be registered in Oregon. The NVP tax began in 2018. The CAT began in 2019. Everyone wants a piece of the action. As has been previously mentioned, if a new regulation is going to add .57% to the coast of every transaction, a business is going to find a way to pass that expense along to the customer. All these fees, charges and taxes are difficult to stomach. Sometimes we just have to pay them if we want our toys.