If your car has been totaled in accident you may be entitled to have your sales tax fee reimbursed. Vehicle sales tax is often charged by many states and municipalities when you first purchase and or register your vehicle. The tax value is usually determined on a sliding scale. The scale takes into account the assessed value of the vehicle and the area that you live in order to determine the amount of tax.
Many states have passed legislation requiring Auto insurance companies to reimburse sales tax on vehicles that are considered a total loss. Currently 32 states have taken this action and others are likely to follow suit. Despite this legislation it is important to know that many insurance companies do not offer to pay this up front. Often times it is necessary to request or remind them to pay the reimbursement. It should also be noted that if you live in a state that does not require sales tax reimbursement you still have the right to make a request for the sales tax. Just because it's not mandatory does not mean that an insurance company will deny your request.
Sales tax reimbursement should not be overlooked. As vehicles continue to skyrocket in price so does the amount of tax. The average sales tax when registering a new vehicle in the U.S. is $150.00. This amount can rise sharply, many of today's luxury SUV's require a tax as high as $2000.00. In either case it's your hard earned money and you have he right to request it back.
The laws vary quite a bit and the federal government has left it up too the discretion of each state to define the details. Many states have extended this legislation to not only cover sales tax in the event of a totaled vehicle; but to also cover registration, title and other DMV associated costs incurred by the loss of a vehicle. Sales tax reimbursement can also be mandatory in the event that a vehicle is returned due to what is known as "lemon" laws, or other recurring recalls or faults that result in a manufacturer reimbursing or purchasing back a vehicle from a consumer for safety reasons.
