Sales Tax - Additional Items

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Legend1673

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I purchased a 5th wheel earlier this year and had it registered in Arizona.  Because of the tax laws for AZ, no sales tax was required at the time.  I am planning to register the trailer in SD for the upcoming year and because no sales tax was paid to AZ, I'm having to pay sales tax to SD.

Question is...the trailer came loaded with a ton of add-on items (solar panels, huge gel battery bank, etc.) which significantly increased the sales price of the trailer.  The seller provided me with a list of additions and their estimated value from NADA.  He told me when I purchased that I could deduct the add-on values when registering the vehicle to only pay sales tax on the "base" price of the trailer.  The agent I'm purchasing from says that is not true and that I need to pay sales tax on the ENTIRE purchase.

Anyone have any experience or insight on this?
 
Legend1673 said:
I purchased a 5th wheel earlier this year and had it registered in Arizona.  Because of the tax laws for AZ, no sales tax was required at the time.  I am planning to register the trailer in SD for the upcoming year and because no sales tax was paid to AZ, I'm having to pay sales tax to SD.

Question is...the trailer came loaded with a ton of add-on items (solar panels, huge gel battery bank, etc.) which significantly increased the sales price of the trailer.  The seller provided me with a list of additions and their estimated value from NADA.  He told me when I purchased that I could deduct the add-on values when registering the vehicle to only pay sales tax on the "base" price of the trailer.  The agent I'm purchasing from says that is not true and that I need to pay sales tax on the ENTIRE purchase.

Anyone have any experience or insight on this?
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Legend1673
I suggest you contact the South Dakota Department of Revenue here: https://dor.sd.gov/contact/ , and ask that question.
 
You are now registering a used trailer, and some states charge tax only on the current value. May not be much different if bought new this year, though.

In general, though, the price on the Bill of Sale is what is relevant, not something concocted from NADA.  By definition, what you actually paid for it is the market value.  The state may use NADA (or other) valuation as a credibility test against low-ball bill-of-sale prices, but in principle what you paid is the vale.    Besides, the NADA options list is a generic thing and rarely applies to a specific RV.  NADA base values are "as typically equipped", so very few of the potential options in their book actually add value. The seller was motivated to make the trailer seem highly valuable, but that doesn't mean it's an actual market price.  In any case, you need to contact SD about the basis they will use to determine taxable value.  Theirs is the only opinion that counts.

Most states do not tax a vehicle you have already owned for some period of time..  You should consider keeping the trailer's Arizona registration long enough to qualify (assuming it is not years).  Once you have owned it for awhile, there may not be any SD sales tax when you bring it to SD. You will want to find out what the minimum time period is, if there is one.
 
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