Used car sales tax takes buyers by surprise Bryant accuser faces

Topeka Capital-Journal, The, Aug 6, 2004 by Ric Anderson Capital-Journal

State law affects transactions between private parties only

KAREN LEE MIKOLS/SPECIAL TO THE CAPITAL-JOURNAL

Dana Darbro, of rural Peru, holds the purchase papers for the 1996 Dodge Neon he bought for $350 only to find out the state is taxing his car for a set value of $2,589. The tax he is supposed to pay --- $176 --- doesn't account for the condition of the vehicle.

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Hear discussion about the change in state law for selling certain vehicles.

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By Ric Anderson

THE CAPITAL-JOURNAL

Dana Darbro thought he was getting a fair deal recently when he bought a secondhand 1996 Dodge Neon.

"The woman who sold it to us had hit a deer," he said. "The front end was damaged and the hood was curled up, so I had to pound that down flat. The headlights were broken, both airbags had deployed and the front windows were both knocked off their tracks when the airbags blew. I had to drag it onto a trailer to bring it home."

"I gave her $350 because of the shape it was in," he said.

But when he went to pay sales tax on the car, he said, he discovered he was being ripped off.

Not by the seller. By the state.

A state law that went into effect July 1 sets the base for calculating sales tax on some vehicle transactions as the higher of two figures --- the selling price as stated by the buyer, or a state- imposed property tax value for the vehicle.

The new law applies only to sales of passenger vehicles and motorcycles between private parties, not to transactions involving licensed auto dealers. Trailers, heavy trucks, antique autos and recreational vehicles are among vehicles not covered by the law.

Darbro said that in his case, sales tax on a $350 selling price would have been $24. He said the new law resulted in a sales tax bill of $176 --- the amount based on the Neon's property tax value of $2,589.

"My question is, if the state thinks this car is worth $2,589, would they buy it today?" Darbro said.

The Kansas Department of Revenue sets vehicle property tax values through a formula involving a percentage of manufacturers' suggested retail prices of vehicles when new, with 15 percent depreciation per year. The values don't take into consideration a vehicle's mileage or condition.

Darbro lives in the southeast Kansas community of Peru, in Chautauqua County, but Shawnee County Treasurer Larry Wilson said he has heard similar complaints since the law went into effect.

"At first, it was pretty quiet," he said. "But lately, it's about every other person."

Legislators adopted the law in May based on an audit report suggesting the state was losing $7 million to $13 million in sales tax revenue per year through underreporting of selling prices by vehicle buyers. For example, a buyer who paid $3,000 for a car might have listed the selling price at $1,000 when registering the vehicle with the county treasurer. In Kansas, sales tax on vehicle transactions between private parties is collected in county treasurers' offices.

In an effort to ensure accuracy, the state used to require each bill of sale to be notarized, but that proved ineffective and was discontinued several years ago.

Kansas Department of Revenue officials said the department didn't propose the legislation.

"Nobody wants to go in and be asked to pay sales tax for a price they claimed they didn't pay," said Richard Cram, KDOR director of policy and research.

The law, which passed as an attachment to an omnibus tax bill, went through the Legislature quietly and with virtually no opposition. Among the reasons lawmakers supported it, Cram said, was that the projected increase in revenue would balance out several new tax breaks for corporations, such as an exemption for aircraft used for business purposes.

Senate Minority Leader Anthony Hensley, D-Topeka, said he had received a number of complaints from taxpayers about the new law.

"This is an issue that the Legislature is going to have to go back in and correct," he said.

Ric Anderson can be reached at (785) 295-1192 or ric.anderson@cjonline.com.

The Associated Press

DENVER --- It has been a long two weeks for the woman accusing Kobe Bryant of rape.

A key court ruling went against her. Courthouse staff mistakenly posted her name on an Internet site --- for at least the second time. The judge lost a battle with the media and released nearly 200 pages of documents from a closed hearing, leading to a barrage of headlines about the 20-year-old woman's sex life. Her attorneys have hinted she may drop out of the trial.

Joseph Rice, a jury consultant with Jury Research Institute in Walnut Creek, Calif., said the developments left the woman's attorneys little choice but to explain why she might try to back out of the case.

"This lets potential jurors know this case has gone off the rails," Rice said Thursday. "She was supposed to have protection and she is losing that protection."

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