Local News

Jul 3, 2014 10:29 PM by Bart Bedsole - bbedsole@kristv.com

Many Question Standard Presumptive Value For Used Cars

CORPUS CHRISTI - Paying sales tax on a used car bought from a private party used to be based primarily on the "honor system".

If you bought a vehicle from another individual, you would go to the courthouse, tell a clerk what you paid for it, and that amount is what you were taxed on.

But an abundance of people lying about the amount they paid prompted lawmakers to do away with the old system.

Nowadays, a computer comes up with the amount you have to pay taxes on.

It's called the "Standard Presumptive Value".

The new system eliminates the truth factor, but some believe the computer value is equally difficult to trust.

Moises Faz bought a used suv just in time for prom this spring.

He paid $1300 dollars for a 2003 GMC Envoy in fair condition.

But at the courthouse, the standard presumptive value from the state was nearly triple that, $3320.

Faz believe the value was very inflated.

"I never would have bought it for $3320, No," he said.

But like it or not, he's stuck paying an extra 150 dollars in taxes because of it.

KRIS 6 News selected several random cars parked outside the courthouse for a similar analysis.

A 2003 Ford F-150 was valued at $11,200, more than three thousand dollars higher than the value from Kelly Blue Book, a widely accepted vehicle valuation service.

But not every estimate was higher.

On this 2006 Nissan Xterra, the Standard Presumptive Value was nearly four thousand dollars less than the blue book value.

The Nueces County Tax Assessor Collector's office hears at least one complaint about the SPV per week, according to Kevin Kieschnick, even though it's not his office that comes up with the values.

"We have to direct them back to the state, and say send your complaints here, because we're just doing what the law says we have to do," he explains.

And people do complain to the state, according to records obtained by KRIS 6 News, saying things like, "This really should be illegal. You are screwing honest texan citizens!" and "You are flat out ripping me off with this "presumptive tax"."

Technically, it's not the government that establishes the standard presumptive value.

It's a company called "Price Digest", a division of Penton Business Media.

According to an invoice from 2008, the company is paid about $73,000 a year to provide the Texas Department of Motor Vehicles with the values.

Unfortunately, no one could explain to KRIS 6 News the formula that Price Digest uses to come up with those values.

No one with the Texas Department of Motor Vehicles or the Texas Comptroller's Office knew the formula, and no one from the Price Digest office in Kansas returned calls for comment.

Websites like Craigslist and Ebay have made finding, buying, and selling cars and trucks from a private owner easier and more popular than the old days of browsing through the newspaper's classified ads.

The increase in private party purchases underlines the need for an accurate assessment system.

Kevin Kieschnick believes the system as a whole isn't too bad.

"Is the data always correct? No," he admits, "I've seen a couple and gone 'How did this happen?'. But generally speaking, they're pretty close."

That doesn't mean there won't be the occasional case of sticker shock for people like Moises, who had to save a lot of money to buy the SUV, and then had to cough up a little more for the taxes.

By law, you only have to pay 80 percent of the SPV, so that makes it a little easier for taxpayers.

You can also appeal the state's value by getting an appraisal from a dealership, but that will cost you at least a hundred dollars, so it's hardly worth it in many cases.

Click here to find the Standard Presumptive Value of your vehicle.

Click here to find the Kelly Blue Book value of your vehicle.

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