What is Standard Presumptive Value?

[reereetx]

I was trying to research how much the tax will cost me on a used car I'm looking at buying.  In my Google search the Texas DMV site came up talking about standard presumptive value.  What is this?  What does it mean?  the used car I'm looking at is a 2004 Tahoe LT with 147K miles priced at $6,995.  The standard presumptive value according to entering the VIN and mileage on the Tx DMV site is $3,100.00.  I'm also trying to determine a good negotiating price for when I go to the dealer this evening.

[Anonymous]

Essentially it's a way for the state of Texas to ensure they get a fair amount of taxes for the purchase of a vehicle.

You will pay sales taxes of 6.25% I believe or the SPV whichever is greater.

For example in your case you will pay 6.25% of $6995 if that's what you end up paying which is $437.18.

If you were purchasing that vehicle from a private party at a sales price of let's say $2500 sales taxes at 6.25% would be $156.25...HOWEVER the state declares the value of that vehicle at $3100 even though you are purchasing it cheaper and charges you $193.75 (6.25%x3100).

I am not saying the vehicle you are looking at is worth $6995 or $2500, just an example above. It basically prevent's the state from becoming the victim of sales tax fraud in which people don't declare the correct sales price when purchasing from a dealer/private party and the state losing out on money they should have recieved in taxes.

[reereetx]

Thank you!  That makes sense now!