State to crack down on used car tax avoiders

In an effort to ease some budget problems in the state, New Mexico is planning to target people who attempt to avoid paying taxes on the sale of their used car.

New Mexico imposes a 3 percent tax on the sale of used cars, but to avoid that cost, some buyers writer a lower purchaser price on the car’s title when they take it to the Motor Vehicle Division (MVD) for registration.

To fight this, New Mexico authorities will compare the purchase price with the vehicle with the “average trade-in” value set by the National Automotive Dealers Association, according to the Associated Press.

“This is a way to make sure everybody is paying their fair share,” Taxation and Revenue Secretary Rick Homans told the news provider.

The MVD expects to take in $6 million this year and another $12 million next year by verifying the prices.

In a similar effort, the IRS over the last few years has stiffened laws to make sure donated vehicles are actually worth the amount claimed in tax forms.

Find New York Used Cars with New Jersey State Auto.