3 Z06ZR1

I live in Oregon which has no sales tax. I was buying a 2005 C-6 in California,
In short thet added over 3 grand in sales tax,they said must be paid
at sale. So i switch to an 2006 for the same optioned cars price with no tax. thoughts?

cfi_luz

Why would you have to pay CA sales tax if you are not a resident? Sales tax is only applicable on vehicle sales in CA for CA residents and is based upon your residence. As such, the sales tax should collected at the time of sale would have been dicated by your home county (each county in the state has its own set sales tax rate). Are you sure the dealer knew you lived in OR?

3 Z06ZR1

Yes He did and checked again and still said it was correct. I told him several
times I lived in Oregon.

keyplyr

FNGVetteFan

Its sales tax, not some type of car related tax. Try going to Home Depot in CA and debate at the register that there is no need to ring up the sales tax because you live in Oregon.

3 Z06ZR1

It's the only state I have ever heard doing this .Sales Tax is paid where you plate it.
I ended getting a 06 for the same price as the 05

WD-40

If you pick up he car in CA you will have to pay the tax, but if the vehicle is shipped to you in Oregon there should be no tax.

not08crmanymore

Thoughts are,you should not buy a car in CALIFORNIA because it's probably the only state that does that,and it's a flat out ripoff!

gilly6993

that makes no sense....you usually only pay sales tax where you register the car....

tiggerrick

Did you buy the 06 from the same dealer and then did not have to pay sales tax? If you did, that seems weird.

I bought my car in LA county and told the dealer I lived in San Bernardino. They adjusted the tax accordingly (down). Granted, it was not much, but every penny counts.

Why did you not buy in Oregon?

If I go to Oregon and buy a car there, would they NOT charge me CA sales tax?

Sven

Interesting how CA is trying to have it both ways: Bought mine in VA; wanted to title/reg in CA (military) ... CA wanted another $3000 in "use" taxes!

Vettlldo

Here is another twist...

I live here in CA and was getting a quote on some parts from a Forum Vendor located in New Jersey and the parts person wanted to add New Jersey State sales tax. When I questioned him why he was adding New Jersey State sales tax on a sale in CA, he didn't reply for about 1 minute and then refuted that it was just sales tax. Needless to say, I didn't see any point in arguing with him nor did I get a clear reason why I was paying sales tax on a $3000 order outside of CA.

It was my understanding that State sales tax on Interstate transactions is only due when the selling business has a point of presence (a valid, licensed business) in the State originating the transaction.

Ed

Another Don

When I bought Ms Scarlett (see avatar) from Carl @ Broadway in The People's Republic of Calif, he told me that if I flew to the dealership and drove the car home, I'd have to pay the CA sales tax of 8.25%. But, if he shipped it to me out of state, then no sales tax. Even though TX would give me a credit for the out of state sales tax when I registered the car, the TX tax is only 6.25% and I'd still be out the 2% difference. The bottom line is that the 2% sales tax "savings" paid for shipping the car half way across the continent.

jimmie jam

i believe that you are correct, sir. CA tax would be due if he titled and taged the car THERE. if the car is going to anywhere else the tax would be collected there. unless the states have an agreement. the last out of state car purchase i did was a couple of years ago in chicago, IL. the dealer collected the IL 6% tax and sent me a slip with the paperwork/car. i then went to the county tag agency to title/transfer a tag but did not pay the tax again. florida got the 6% from IL. if the two states did not have this agreement i would NOT have given the dealer the tax money in IL. fyi if their tax rate was more/less the state of FL would have given back or collected the difference. i do not understand how a CA dealer is doing this. wait untill you go to OR to title/tag your car. they'll want to collect the tax also. also, in AZ if you drive the car out of the state (not titled/taged) they will collect the tax because of you taking "possession" there. if the car is shipped, you have not "taken possession" yet and they will not collect the tax.

OkCarl

California sales tax is due if the vehicle is physically picked up here by the ultimate retail customer. The sales tax however is not charged again when the customer arrives home and registers his vehicle, the only thing that may be due is extra plate costs and any difference in sales tax percentage. If the vehicle is shipped out of the state by a commercial trucker the tax is avoided which in the case of oregon which has no sales tax makes sense. I ship vehicles across the Oregon border to out of state customers all of the time.
From where our dealership is located it is only $350.00 to get a Corvette to Medford. There are options in this state you just need to be dealing with someone that understands the regulations and can figure out the most cost effective scenario for your transaction.

FredSM

Depends upon whether the state in which you register the car honors the sales tax of the state in which you purchased it. They typically do not. It would otherwise promote out-of-state buying, which most states don't want for obvious reasons. It is a rip-off, but CA doesn't own that market. Both VA and MD do the same thing (or used to). Unfortunately I know the hard way. Besides, how else could CA afford its social programs? We tax our "friends"! I consider it a sunshine tax.

FM

P.S. Hey Carl . . . does someone in SoCal have to pay sales tax in NoCal?

OkCarl

Hey Fred,

We collect the tax for them but at their specified tax rate for where they live. We still also handle all of their DMV transaction and they gey their plates in the mail.

Carl

peelrubber

For many decades Calif has had an aggressive taxing structure. Yes, each state/county has its own different set of rules. And there have been times that other states have collaborated with Calif so that the consumer/taxpayer did not escape paying taxes.

We have a sales tax in WA. I'm picking up a new Vert in Calif and driving it home. The Calif sales tax is paid when I sign the purchase agreement. I'm toast once I set foot in Calif and take possession. Later, when I register/license the car in WA, I am assessed an incoming Use Tax in WA. This is the equivalent of the Sales Tax when goods are imported into WA. The upside is that WA gives me a credit for the tax I already paid to Calif. So the tax is only paid once. But there is a slight difference, as I will be paying just a bit, as the WA tax rate is 9.9% and Calif is 8.25%. In summary, I am out of pocket 9.9 % of the full purchase price.

What bothers me is that Calif does not allow for trade-in value against the purchase price. As an example, here in WA, if I buy a car from a WA dealership at $50,000 and my trade-in allowance is $40,000, I will only pay a sales tax on the difference of $10,000. ($990 of sales tax) Not so in Calif, the CA consumer must pay sales tax on the full value of $50,000 ($4,125 sales tax)

The tax law evolves daily. Presently there are over 20 states trying to write and execute a uniform system of collecting sales tax on internet sales. Mail order purchases generally escape taxation. But over the past few years, many of the large national vendors have voluntarily started to collect sales tax from the buyer and remit the taxes to the state that the buyer resides. The vendors are not legally required to do so, but they have volunteered, anticipating enactment of a uniform collection system.

With regard to airplane sales, in the past Boeing would deliver aircraft to a non-tax state. The buyer would take possession outside WA, therefore not pay WA sales tax. That was a sham. I don't know if this practice still applies. the loophole might have been plugged by now. Same thing with commercial vessels. The buyer would take possession on the high seas, therefore avoiding tax.

An OR resident might try having a car trailered from a CA dealership to OR and have ownership/FOB occur in OR. But I would bet that CA already has a law on the books specifying that CA sales tax must be paid regardless if possession took place in a non-tax state. CA is agressive and I doubt an accomodation/agreement exists with the OR legislature. (In the corporate income tax world, this was referred to as taxation of "throwback sales.") My suggestion: talk to a CA CPA and ask to see the law stating that sales tax must be paid on all motor vehicle purchases. If you ask the CPA to see if an exemption is allowed for OR residents, not likely that he will find anything in writing, but still might be possible.

Excuse all of this negativism, but is has provided some rationale to paying sales tax when I pick up my new C6. Hope this hepls others out there too.

Irv

Justify all you want, but this is incorrect. I talked to the CA Franchaise Tax Board and the OR DMV, and CA can't charge sales tax (which, BTW, is actually a "use tax" in CA) on transactions that don't take place in the state, and a transaction doesn't occur until the buyer takes possession. This is why internet and mail order sales aren't taxed from CA businesses. I'm no attorney, but since a CA FTB employee explained this to me I assume it's accurate.

peelrubber

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.