Buying cars from military personnel (Read 534 times)

6716J

Buying cars from military personnel
« on: November 05, 2019, 09:30:40 AM »
Looking for the HRS or equivalent reg that states where during the transfer of ownership FROM a MIL to CIV that the CIV owner has to pay all the unpaid weight taxes for however many years the vehicle was owned and registered under the MIL exemption. http://www.honolulu.gov/csd/mvinformation.html (Hawaii residents on active duty and members of the National Guard and Reserve and who are assigned to units located in Hawaii are exempt from motor vehicle weight taxes for one vehicle registered in their name.  You must submit a properly completed Hawaii Resident Certificate, Form CS-L (MVR)50A, for each registration, renewal or transfer transaction.) My wife's parents got screwed a couple of years ago ($3K back taxes) on this and want to know where the rule is and I want to get it changed for all of us locals. Tired of us paying the price for their benefit and I'm prior service too. I want to see the exemption removed because they all use the roads too or at least have the back tax penalty removed on transfer of ownership.
I'd rather have a bottle in front of me, than a frontal lobotomy.

drck1000

Re: Buying cars from military personnel
« Reply #1 on: November 05, 2019, 09:48:22 AM »
Let me check with one of my buddies.  He's in the Guard and has active duty friends.  I know he buys and sells his cars pretty often, as well as his coworkers.

zippz

Re: Buying cars from military personnel
« Reply #2 on: November 05, 2019, 10:18:29 AM »
That doesn't sound right.  Perhaps the mil didn't pay any of their registrations or a mistake in the registration office.  What did the registration department say when you brought it up.

    [§249-6.5]  Exemption for National Guard, military reserves, and other active duty military personnel claiming Hawaii as their residence of record.  One noncommercial motor vehicle registered to a member of the National Guard, military reserve, or armed service, including the Coast Guard, who is:

     (1)  Assigned to a unit in the State; and

     (2)  A member in good standing,

shall be exempt from the vehicle weight tax provided for in this chapter. [L 2008, c 141, §1]

 
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Flapp_Jackson

Re: Buying cars from military personnel
« Reply #3 on: November 05, 2019, 11:05:32 AM »
Sounds like a computer glitch.

With the military non-resident exemption removed, the system appears to be making the assumption that any back taxes and penalties are now due.

1. Taxes not paid for X years.
2. No exemption in effect with new registration.
3. Must collect all taxes before issuing new registration.

There should be a step to apply previous exemptions to the process.

Taxes don't apply to the CAR.  They apply to the OWNER.  If there was an exemption in the past, then the state can't seek payment from a new owner who has no exemption for those exempted years.

Sounds like something the local new channels would be interested in making public.  No matter how you feel about military exemptions (even though there are very valid reasons for them), non-military owners should not be getting charged for EXEMPTED TAXES FROM A PREVIOUS OWNER.

EXEMPTED doesn't mean DEFERRED.  it means "NOT OWED".

If the registration was current and the transfer was completed at DMV within 10 days of purchase, there should be no back taxes or penalties at all.  If the service member let the registration lapse and did not renew the exemption for 30 days, that could be a problem.
« Last Edit: November 05, 2019, 11:23:12 AM by Flapp_Jackson »
Belief leads people to accept the most ridiculous things as the absolute truth.

6716J

Re: Buying cars from military personnel
« Reply #4 on: November 05, 2019, 11:41:10 AM »
Sounds like a computer glitch.

With the military non-resident exemption removed, the system appears to be making the assumption that any back taxes and penalties are now due.

1. Taxes not paid for X years.
2. No exemption in effect with new registration.
3. Must collect all taxes before issuing new registration.

There should be a step to apply previous exemptions to the process.

Taxes don't apply to the CAR.  They apply to the OWNER.  If there was an exemption in the past, then the state can't seek payment from a new owner who has no exemption for those exempted years.

Sounds like something the local new channels would be interested in making public.  No matter how you feel about military exemptions (even though there are very valid reasons for them), non-military owners should not be getting charged for EXEMPTED TAXES FROM A PREVIOUS OWNER.

EXEMPTED doesn't mean DEFERRED.  it means "NOT OWED".

I agree except that the taxes are on the CAR (actually the plates), not the OWNER. DMV doesn't car who owned the car just if the plate fees are paid or not. This is why I want to have it changed. It's just plain wrong. Why should anyone have to pay for the failure of others not paying their fair share? But I guess I answered my own question by living in a communist state....  :grrr:
I'd rather have a bottle in front of me, than a frontal lobotomy.

Flapp_Jackson

Re: Buying cars from military personnel
« Reply #5 on: November 05, 2019, 12:02:59 PM »
I agree except that the taxes are on the CAR (actually the plates), not the OWNER. DMV doesn't car who owned the car just if the plate fees are paid or not. This is why I want to have it changed. It's just plain wrong. Why should anyone have to pay for the failure of others not paying their fair share? But I guess I answered my own question by living in a communist state....  :grrr:

Before bashing service members for not "paying their fair share," look up the Servicemembers' Civil Relief Act, formerly the Soldiers' and Sailors' Civil Relief Act.

https://fas.org/sgp/crs/natsec/R45283.pdf

It's why military who claim residence in another state other than where they are stationed are exempted from certain taxes.  If they are legal residents of Hawaii and stationed in Hawaii, then no exemption.

If a car sits on a lot of a new car dealer, and is sold to a Hawaii resident, I don't think the new owner is on the hook for any tax breaks the dealer received while it was sitting there.  I'm positive dealers aren't paying all the weight and road taxes on their inventory.  I'm also positive buyers aren't being stuck with those waived taxes.
« Last Edit: November 05, 2019, 12:12:03 PM by Flapp_Jackson »
Belief leads people to accept the most ridiculous things as the absolute truth.

Flapp_Jackson

Re: Buying cars from military personnel
« Reply #6 on: November 05, 2019, 12:15:44 PM »
BTW, I've forgotten to renew my registration on time in the past.  The only penalty if it was still in the same year was having to drive to the DMV -- can't renew expired tags online.

Now, however, the state tacks on a $16 flat penalty if you don't renew a registration by the due date.  Just another money-grab by the state.

I think the thing about paying exempted back taxes to register a car is a mistake, as I said.  if not, then it's one of the most ridiculous money-grab laws on the books.
Belief leads people to accept the most ridiculous things as the absolute truth.

6716J

Re: Buying cars from military personnel
« Reply #7 on: November 05, 2019, 12:32:54 PM »
Not really bashing on service members. Just get frustrated from time to time on the flip side where gov't screws us and we have to pay for that. Like i said, I'm prior service and my son is a jarhead too.
I'd rather have a bottle in front of me, than a frontal lobotomy.

Flapp_Jackson

Re: Buying cars from military personnel
« Reply #8 on: November 05, 2019, 12:41:44 PM »
Not really bashing on service members. Just get frustrated from time to time on the flip side where gov't screws us and we have to pay for that. Like i said, I'm prior service and my son is a jarhead too.

Then you should be well aware that no service member should be required to pay taxes in more than one state. 

I could be a resident of FL (no state income tax) and driving across 20-30 states in my RV every year.  Should I be paying taxes in all 20-30 states?

Rhetorical, of course.
Belief leads people to accept the most ridiculous things as the absolute truth.

GTEC

Re: Buying cars from military personnel
« Reply #9 on: November 06, 2019, 06:56:57 AM »
the change was around 2015ish
in the past, the dmv collected all of the unpaid registration fees from the point the vehicle was registered here - when transferred from exempt party to civilian party
also during this time, "back taxed" vehicles would "fall out" of the system and could be registered by paying only the current year

now
transfer from exempt to civilian requires a prorated registration payment for the current year (max 1 full year)
and back taxed vehicles no longer fall out - payment of all past due is required before registration
even a mechanic's lien will not bypass this requirement

6716J

Re: Buying cars from military personnel
« Reply #10 on: November 06, 2019, 07:22:24 AM »
the change was around 2015ish
in the past, the dmv collected all of the unpaid registration fees from the point the vehicle was registered here - when transferred from exempt party to civilian party
also during this time, "back taxed" vehicles would "fall out" of the system and could be registered by paying only the current year

now
transfer from exempt to civilian requires a prorated registration payment for the current year (max 1 full year)
and back taxed vehicles no longer fall out - payment of all past due is required before registration
even a mechanic's lien will not bypass this requirement

Thanks

Do you happen to know the reg or statute that makes this happen?
I'd rather have a bottle in front of me, than a frontal lobotomy.

Flapp_Jackson

Re: Buying cars from military personnel
« Reply #11 on: November 06, 2019, 11:23:47 AM »
Still doesn't explain why, if the vehicle was EXEMPT under the service member's name, why it can also be considered as "back taxed." 

Either the taxes are waived, or they are not.

Seems like an intentional (and possibly illegal) burden to place on service members by driving up the resale value of their vehicles.

Some military members ought to sue the state.  Would not be the first time.  In fact, the US sued the state about a decade ago for impounding and selling at auction service member's vehicles without first obtaining a court order as required by the Servicemembers' Civil Relief Act (SCRA).

Seems the state does whatever it wants to take our money, then has to be sued to stop, even when the law is clear what they are doing is in violation.
Belief leads people to accept the most ridiculous things as the absolute truth.

Heavies

Re: Buying cars from military personnel
« Reply #12 on: November 06, 2019, 08:03:14 PM »
I've purchased vehicles from service members multiple times.  I have never had to pay any road tax for the previous owner.

Flapp_Jackson

Re: Buying cars from military personnel
« Reply #13 on: November 06, 2019, 08:46:10 PM »
I've purchased vehicles from service members multiple times.  I have never had to pay any road tax for the previous owner.

That's why I'm confused.  Unless the service member (1) didn't file an exemption form EVERY YEAR they owned the car, and/or (2) let the registration lapse for more than 30 days, there should not be any "back taxes".

If the member was a reservist and a Hawaii resident, they get an exemption on just one car.  I'm wondering if the exemption was lifted on the old car and applied to a new purchase?  Still, taxes were EXEMPTED, not DEFERRED.  Only the taxes owed after the newly registered car would be owed.

According to GTEC, this was a 2015 change.  So, if your purchases were prior to that, your experience won't apply in the current legislative BS situation.

I'm talking logic and reasoning.  I understand that's futile when the gov't wants more revenue.
« Last Edit: November 07, 2019, 10:55:45 AM by Flapp_Jackson »
Belief leads people to accept the most ridiculous things as the absolute truth.

6716J

Re: Buying cars from military personnel
« Reply #14 on: November 07, 2019, 08:00:26 AM »
It's a very confusing system. And most likely intentional :(

Gotta pay for that rail somehow
I'd rather have a bottle in front of me, than a frontal lobotomy.

GTEC

Re: Buying cars from military personnel
« Reply #15 on: November 08, 2019, 06:46:18 AM »
I can't explain how/why or what rule/law/etc...
all I know is when we checked last week - we were told new owner will be charged $10 transfer + prorated reg fees
meaning if registration is due Jan 2020, you will pay for nov & dec now - then pay full year thereafter.

if in doubt - finalize the purchase at the counter of satellite city hall

Flapp_Jackson

Re: Buying cars from military personnel
« Reply #16 on: November 08, 2019, 11:15:24 AM »
I can't explain how/why or what rule/law/etc...
all I know is when we checked last week - we were told new owner will be charged $10 transfer + prorated reg fees
meaning if registration is due Jan 2020, you will pay for nov & dec now - then pay full year thereafter.

if in doubt - finalize the purchase at the counter of satellite city hall

All of that is in line with what I was saying.

Maybe it's too crazy to state properly, but the issue appears to be that buying a used car from a servicemember results in the new owner owing not only the prorated registration fee for the remainder of the year + transfer fee - as you stated-
but they are also on the hook for all the exempted taxes the servicemember didn't have to pay for however many years.

From the OP:
Quote
during the transfer of ownership FROM a MIL to CIV that
the CIV owner has to pay all the unpaid weight taxes
for however many years the vehicle was owned and registered

under the MIL exemption
Belief leads people to accept the most ridiculous things as the absolute truth.

Tom_G

Re: Buying cars from military personnel
« Reply #17 on: November 08, 2019, 11:51:41 AM »
Maybe it's too crazy to state properly, but the issue appears to be that buying a used car from a servicemember results in the new owner owing not only the prorated registration fee for the remainder of the year + transfer fee - as you stated-
but they are also on the hook for all the exempted taxes the servicemember didn't have to pay for however many years.

That was exactly my experience. Bought my current truck from a serviceman. Went to register it, and had to pay the registration fees for the several years it had already been on the island as a serviceman's vehicle.
The difference between theory and reality is that, in theory, there is no difference between theory and reality.

6716J

Re: Buying cars from military personnel
« Reply #18 on: November 08, 2019, 12:18:41 PM »
That was exactly my experience. Bought my current truck from a serviceman. Went to register it, and had to pay the registration fees for the several years it had already been on the island as a serviceman's vehicle.

And this is exactly what i want to get fixed in next years legislative session. I have to go to Kidani as my Mililani person and want her to introduce it to remove any past liability to a new owner. At least from a MIL to CIV. We can work on the CIV to CIV too. Not right that shady people try to sell cars cheap to and leave them hanging with a couple years back taxes.
I'd rather have a bottle in front of me, than a frontal lobotomy.

Flapp_Jackson

Re: Buying cars from military personnel
« Reply #19 on: November 08, 2019, 01:29:53 PM »
And this is exactly what i want to get fixed in next years legislative session. I have to go to Kidani as my Mililani person and want her to introduce it to remove any past liability to a new owner. At least from a MIL to CIV. We can work on the CIV to CIV too. Not right that shady people try to sell cars cheap to and leave them hanging with a couple years back taxes.

You didn't mention shady people selling cars cheap.  Are you saying the MIL member was shady?  Or is a shady CIV buying from MIL and then reselling with back taxes owed?

Did the MIL seller not renew with the exemption form for each year and lose their exemption?

If the law is the reason CIVs are getting stuck with back taxes, why is the seller shady? 
Belief leads people to accept the most ridiculous things as the absolute truth.