California sales tax
07-08-2007, 02:32 PM
#23
Le Mans Master
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St. Jude Donor '06
I live in WA (we have sales tax) and purchased a car in CA a couple of years ago. Yes, I was charged CA sales tax by the dealer in Monterey which happened to be a little lower than our local sales tax. I paid the difference to the State of WA when I registered the car in WA.
07-08-2007, 02:37 PM
#24
Le Mans Master
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I was looking at purchasing a new Z in California. I was told if I came down to take delivery from their lot and drive the car home. I would have to pay the tax. If the car was put on a truck and shipped to Oregon then no tax. And if it were to be trucked out of state, the dealer told me that if I chose a trucking firm I would have to supply the firms contact info and that they HAD to make all the arraingments for the actual transportation of the car. I know of one person that had a flat bed tow truck pick his car up at the SoCal dealer, truck it off their lot around the block and drop the car off to the owner. The dealer I was working with wouldn't do this.
The other dealer I was working with in Indiana also told me that their laws are much like California. If they truck the car out of state no tax, if I take possession in Indiana and drive it home, I had to pay the tax. So in the end I found a dealer in Medford that price matched the out of state dealers and I flew down to Medford from Portland and purchased the car and drove it home. And I may add smiling all the way home in my new Z06
The other dealer I was working with in Indiana also told me that their laws are much like California. If they truck the car out of state no tax, if I take possession in Indiana and drive it home, I had to pay the tax. So in the end I found a dealer in Medford that price matched the out of state dealers and I flew down to Medford from Portland and purchased the car and drove it home. And I may add smiling all the way home in my new Z06
07-08-2007, 02:46 PM
#25
Pro
You could have bought the car here in Georgia from Maxie Price Chevrolet in Loganville, not paid the GA sales tax and I would've driven the car to you with you paying the gas, lodging and food and my plane trip back home and you still would have had money left over. Or better yet, you could have made arrangements with Maxie Price to ship you the car to Oregon for close to a grand.
07-08-2007, 02:57 PM
#26
This is really off topic for CF. Although it may be true that CA vendors may not be charging CA taxes on internet sales shipped outside CA, there are a few larger CA vendors already charging non-CA tax on internet sales. This is where internet sales are heading. Within a couple of years, internet sales will be subject to sales and use taxes if one or both states (origination state or destination state) has such taxes and agrees to collection. It won't matter where possession takes place. As I stated before, many national vendors have already been collecting the tax and remitting the tax to the state treasurer where the buyer resides. This has been going on for some time even though the vendors are not required to do so. They anticipate enactment by Congress of a uniform collection sytem. An example is Dell PC. They collect sales tax on mail order shipments. Same with CDW. Same with Toyota mail order (Toyota has a big HQ in CA.) More than 20 states have already agreed to reciprocity of collecting taxes on behalf of each other. (Don't know if CA is among them.) The delay is in establishing an efficient collection/disbursement system among the participating states. There is a fed moratorium preventing assessment of local taxes on ISP services. When that expires, if it hasn't already, it will open the door to states' taxation on all mail order sales. This will be unfortunate for the consumer, but the intent is to put local retailers on the same playing level as mail order vendors. Each time I make a significant purchase via internet or phone, I ask if sales tax is charged. If yes, I move on to a different vendor until I find one that doesn't "voluntarily" charge sales tax. Fortunately, I've found that less than 5% are jumping the gun.
As for the rest of your post, it doesn't apply to the OR-CA auto purchasing situation, which is the point of this thread. CA doesn't collect sales tax if you buy from a CA dealer and you are an OR resident that takes possession at the OR border or beyond. End of discusison. Finally, the businesses like Dell have to collect sales tax in states in which they have a business presence. If you have an office in Albany you can't evade NY sales tax to a customer in Buffalo by shipping from your depot in Oregon. Most dealers aren't multi-state businesses, so you don't see this situation often with retail car sales.
Last edited by Irv; 07-08-2007 at 02:59 PM.
07-08-2007, 03:04 PM
#27
And one more thing I learned from the CA Franchise Tax Board, it is very relevant whether or not your state has a sales tax or a use tax. The difference is, according to the CA FTB, that a sales tax is due only at the point of a transaction, while CA's "use tax" applies to anything you purchase while a resident of the state and use in the state. So if you do order an item from the internet as a CA resident for CA use and don't pay sales tax you technically still owe CA their use tax, and sure enough there's a line item for this on the CA income tax return. Ya gotta love the Peoples Republic of California!
07-09-2007, 03:56 PM
#28
Heel & Toe
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SC & GA Sales Tax Loophole ??
What is really interesting is that I can buy a car from a dealer in South Carolina, which has a very low fee for sales tax on automobiles, and resell that "new" car to a guy in Ga., possibly other states, as a "used" car, with under usually 20 miles on it, and because I am reselling the car as used, the customer in Ga. does not have to pay Ga. sales tax because he purchased it used from a person, not a dealership.
Curious ? PM me.
Curious ? PM me.
07-09-2007, 04:40 PM
#29
Race Director
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You could have bought the car here in Georgia from Maxie Price Chevrolet in Loganville, not paid the GA sales tax and I would've driven the car to you with you paying the gas, lodging and food and my plane trip back home and you still would have had money left over. Or better yet, you could have made arrangements with Maxie Price to ship you the car to Oregon for close to a grand.
07-09-2007, 05:43 PM
#30
Burning Brakes
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It's "Road Tax" in Ca, not a sales tax. If it were a true sales tax, individual transfers of used vehicles would not be subject. I have done many "title only" transactions in CA where no road tax ("sales tax") is due until the car is actually put on the road. You should be able to take out of state delivery w/o tax of any kind. But, as stated before, you title the car in your state not CA, OR title-only in CA and then register it in your home state. Unless something has changed in the past few years, it is NOT a sales tax, but a ROAD tax.
07-09-2007, 06:23 PM
#32
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Sales taxes and how to pay them (or not) is a very relevant subject for this forum.
The California situation sounds like a recent change in Arizona. Yet Arizona has complicated it even more. In Arizona the purchase of a car driven out of state is taxed at the current rate in Arizona, or if your home state rate is lower it is taxed at the difference between Arizona and your home state. It is a complicated system that I can not thoroughly understand nor explain but I know Arizona wants money. This has become a hassle for buyers of big dollar cars at the various Phoenix area collector car auctions each January.
While a new Corvette may cost $50K or so and the sales tax is costly, it is a much greater burden for purchasers of new motor homes - which may cost $300K or $400K or more. Montana motor home dealers and state government have taken advantage of this situation - much to the concern of California. The deal is to buy from a Montana dealer and register the vehicle to a newly created not for profit Montana corporation in Montana. There is no sales tax in Montana and yearly license plate renewal fees are often less than many states (depending on the type of vehicle). It costs about $1K to have a Montana attorney set up such a corporation. This is also a good plan for purchasers of very expensive collector cars but may make sense for someone with two or three expensive cars - say a Corvette, a Suburban and an F-350.
In most states this works well but some states, especially California, are taking aggressive actions against the scheme.
I've purchased new cars in Colorado and Illinois, driven the cars home and then registered and paid sales tax on in my home state, without ever paying local sales taxes to those Colorado or Illinois dealerships. However the California/Arizona model may become attractive to other states soon and I would believe anything about aggressive state sales taxation.
The California situation sounds like a recent change in Arizona. Yet Arizona has complicated it even more. In Arizona the purchase of a car driven out of state is taxed at the current rate in Arizona, or if your home state rate is lower it is taxed at the difference between Arizona and your home state. It is a complicated system that I can not thoroughly understand nor explain but I know Arizona wants money. This has become a hassle for buyers of big dollar cars at the various Phoenix area collector car auctions each January.
While a new Corvette may cost $50K or so and the sales tax is costly, it is a much greater burden for purchasers of new motor homes - which may cost $300K or $400K or more. Montana motor home dealers and state government have taken advantage of this situation - much to the concern of California. The deal is to buy from a Montana dealer and register the vehicle to a newly created not for profit Montana corporation in Montana. There is no sales tax in Montana and yearly license plate renewal fees are often less than many states (depending on the type of vehicle). It costs about $1K to have a Montana attorney set up such a corporation. This is also a good plan for purchasers of very expensive collector cars but may make sense for someone with two or three expensive cars - say a Corvette, a Suburban and an F-350.
In most states this works well but some states, especially California, are taking aggressive actions against the scheme.
I've purchased new cars in Colorado and Illinois, driven the cars home and then registered and paid sales tax on in my home state, without ever paying local sales taxes to those Colorado or Illinois dealerships. However the California/Arizona model may become attractive to other states soon and I would believe anything about aggressive state sales taxation.
07-09-2007, 07:08 PM
#33
Burning Brakes
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You should be able to take a trailered delivery of a CA car for out of state purchase -- theoretically when the wheels hit the ground, it's subject to road tax. For a car bought from a dealer your big issue is not the law, but the dealer who is going to cover his *** at all costs. While opening a corp may be appealing to yacht owners in CA (I considered it once), buying a car for out of state delivery should not be a hassle. Well... it will be, but legally it should not be. The key phrase is "title only." I have done this on a bunch of collectors cars (some from dealers) and NEVER paid a road ("sales") tax. All were bought in CA.