Fred Buck of Kennewick is ending the year with a victory over the state's revenue agents.
Fred Buck of Kennewick is ending the year with a victory over the state’s revenue agents.
Buck, who purchased a used car for his son to drive while away at college, challenged a law that allows state agents to charge a sales tax on what they say a car is worth, even if the purchase price was much less, the Tri-City Herald reported in Sunday’s newspaper.
Buck claims he shouldn’t be forced to pay tax on more than he spent.
“It makes no sense,” said Buck, whose $3,000 purchase of a 6-year-old Suzuki Forenza with 65,000 miles on it from a private party has him caught in a $270 squabble with Washington’s Department of Revenue.
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Buck paid cash for the car and reported that amount on the sale, as required to the state. But revenue officials said he got too good of a deal and the car’s true worth is $6,150. That is why the state wanted another $270, said Michael Gowrylow, spokesman for the Department of Revenue.
“He very well may have paid $3,000 for it, but there’s no way the state can know that,” Gowrylow said.
The Legislature passed a law years ago that allows the state to determine fair market values on motor vehicles. Any private party sale is subject to review to determine its accuracy, Gowrylow explained.
“Getting a good deal in buying a car at half price doesn’t mean you will pay only half taxes. It’s like Ronald Reagan said, `Trust and verify,’ ” he added.
Buck is particularly rankled because he bought the car so his son would have a vehicle to use in Oregon while attending college there, not for use in Washington.
Buck also is offended that the state won’t accept his truthful, sworn declaration on the price he paid.
“After agreeing on a price, the owner asked me how much I wanted him to put down that we paid. I told him I was a Christian, and if a Christian won’t tell the truth, who will?” Buck said.
“My integrity is worth more than a couple hundred bucks,” Buck said.
Honesty didn’t impress revenue agent Ashley Supry in Olympia, however.
Supry wrote to Buck’s son, the registered owner of the Suzuki, saying he should have paid tax on $6,000 at the time the car was licensed, so another $270 was owed.
“There is a significant difference between the average retail value for your vehicle and the taxed value,” she wrote, advising Buck to get an appraisal on the Suzuki by a registered car dealer.
Buck did just that, and now has a signed appraisal on the Suzuki for $2,000, which is based on the fact that the car had been in a wreck. It was in good mechanical condition, but not in good enough shape with the paint and body work to deserve a higher value.
“So now that I have proof that I paid too much for the car, I want the state to refund me $100 for the overpayment of tax I made,” Buck said.
Buck also noted that online research on values of the Suzuki model run from $2,500 to $3,500, which is within the range he paid.
Gowrylow said Buck’s complaint about the state over-valuing a used car purchase is the first he has heard in at least 10 years.
Supry told the Herald the law that allows state reviews of private vehicle purchases is difficult to enforce.
“The tax gets applied to things that have paper trails,” she said. That includes cars, trucks and even furniture and computers.
Buck said the appraisal by a registered car dealer fixed the problem.
Supry called Buck this week and said everything was satisfactory and no additional tax was due by Dec. 28, the deadline set by the state.
Buck says he now knows something else he should have known sooner: Had his son purchased the car as an Oregon resident, while attending college, there would have been no tax due in Washington if he waited at least 90 days before returning to Kennewick.
Buck also is bothered that the state can determine values in an open market economy.
“How can (they) do that without looking at the vehicle? And when the state determines the price, then we’ve become a socialist state economy,” he said.
Information from: Tri-City Herald, http://www.tri-cityherald.com