The process for paying sales tax on a vehicle purchased from a family member is fairly straightforward. Here's an overview of the steps you may need to follow:
1. Determine the taxable amount: The sales tax is calculated based on the purchase price of the car, which is the agreed-upon amount you are paying for the car.
2. Calculate the sales tax: Michigan applies a 6% sales tax on the purchase of vehicles. To calculate the tax amount, multiply the purchase price by 6%.
3. Complete and submit Form 3129: This is the Michigan Certificate of Title and Registration Application. When completing the form, you will need to indicate that the vehicle is purchased from a family member and report the purchase price. The sales tax due will also be calculated on the form.
4. Pay the sales tax: Along with the completed Form 3129, you will need to pay the sales tax amount to the Michigan Department of State (MDOS). You can pay the tax in person at a Secretary of State branch office, by mail, or online through the MDOS website.
It's worth noting that there may be additional fees associated with the vehicle purchase, such as registration fees and title transfer fees. You will likely be responsible for paying these fees in addition to the sales tax.
Before completing the transaction, it's advisable to consult with the Michigan Department of State or a qualified tax professional to confirm the specific requirements and procedures for purchasing a car from a family member in Michigan. They can provide you with the most up-to-date information and guidance to ensure a smooth buying process.
