“It won’t be so easy for used car buyers to get a good deal any more, at least when it comes to paying taxes on that deal. A new process is now in force when a car buyer walks into a licensing agency to transfer the title. The car’s VIN (vehicle identification number) will be typed into a computer and the baseline price of the car will pop up. If the price the purchaser paid is within new state parameters, the title will be granted. If the price was less, proof will be required. The process began on July 24. The new system will ensure that the same use tax rules are applied evenly and consistently statewide, said Nancy Kelly, assistant director of vehicle services with the Department of Licensing. So no matter which licensing or revenue officer a customer goes to, the vehicle’s fair market value should be the same. As a result, a good deal on a used car won’t translate into lower taxes. Purchasers will be paying taxes on the state’s price. The computer listing includes prices for all cars manufactured in the last 20 years. State news releases don’t mention one major reason for the change, which is to reduce the under-reporting of car purchase prices, and thereby the state’s cut of the action. For example, if one private party buys a used car from another private party for $10,000, they might agree to put $7,000 on the title in order to save the purchaser some money in taxes. Such under-reporting has been a common occurrence in the past, according to Barb Oleson, who works in the licensing department of the Island County Auditor’s Office. A lot of people bought $200 cars, she said Monday, laughing about an extreme example of under-reporting a car’s purchase price. The use tax is levied only if the sales tax was not, and is the exact amount of the sales tax in each jurisdiction. Assuming an 8 percent sales tax, under-reporting a car’s sale price by $3,000 would save the purchaser $240 in use taxes. Oleson said her department always tried to determine a fair market value for an automobile if one seemed undervalued. They’d take the average of the high and low in the Kelley Blue Book of auto values. But subagents sometimes weren’t so careful and would just take the purchaser’s word, she said. They got pretty lax. In training sessions to prepare for the new procedure, Oleson learned that the changes came after the state Department of Revenue audited the Department of Licensing in 1998 and concluded that not enough use tax was being collected compared to the true market value of the cars changing hands. Following the audit, the Department of Licensing contracted with National Market Reports to receive updates on current fair market values about every six weeks. This provides licensing offices with baseline values for cars, not counting accessories. While the DOL’s Kelly says use tax laws, rules or policies haven’t changed, in fact it will be more difficult for buyers to under-report the value of their purchases. If a purchaser claims to have paid less than the baseline price parameters, Oleson said, he or she will be required to provide proof, perhaps by getting an appraisal. They’ve got to give us proof, she said, before the new title is granted. The decision isn’t even in the hands of the licensing agent. According to Oleson, If the price is in the range the computer will let us go on. If not, the transaction is halted until an agreement is reached. It’s possible to receive an exception to the baseline price, but don’t try it too often. They’ll keep track of how much you use the exception, Oleson said. Judy Hadlock, licensing agent in Freeland, saw problems with the new system increase as the week wore on. On Monday afternoon, she said that the new procedure was working well. All the vehicles checked early in the day had fallen within the state’s price parameters except one — an old truck the man said he had purchased for one dollar. For vehicles more than 20 years old, the agents are given a chart to consult. And while she and the man reached agreement on a fair price on which to pay the use tax, he eventually walked out when he found out about a financial penalty for failing to transfer the title within 15 days. But by Thursday, Hadlock had dealt with more complaints from auto purchasers. We’ve had people leave, rather than pay the tax, she said. The bugs of the system are starting to become apparent. Hadlock said people unhappy with the state price for the car they purchased have a lot of options to prove they paid the correct price. But the burden of proving the real price of the vehicle rests with the purchaser. Those who can’t provide the proof will just have to pay taxes on the state’s listed price. And if you really got a good deal on a vehicle, you’ll be paying taxes on the higher value set by the state.”