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2012 Year End Delivery & Tax Credit Issues

Discussion in 'Model S: Ordering, Production, Delivery' started by Robert.Boston, Nov 21, 2012.

  1. Robert.Boston

    Robert.Boston Model S VIN P01536

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    It appears that time to transport the Model Ss across the country could result in hundreds of Model Ss being completed in 2012 but delivered in 2013. This is bad because:
    1. It shifts revenue recognition for these sales into 2013. In round numbers, 400 cars @ $80,000 = $32 million of deferred revenues for TSLA.
    2. It shifts the US and state tax credits from 2012 to 2013. This messes with some of us who did our tax planning relying on Tesla's assurance (mine, in writing and a phone call to me from Palo Alto) that I'd have delivery in 2012.

    Rather than just whining, here's a proposal: Tesla should offer to move these end-of-year cars to Las Vegas. Buyers fly to Vegas, take possession, drive around the block, and fly home. Tesla then delivers the cars to us in due course.

    Why Las Vegas? No sales tax for cars leaving the state (according to this Nevada Department of Taxation document), unlike California.

    Does this make sense? The ~$600 or so in my cost is far lower than the penalty I may end up paying to the IRS. Heck, if work isn't too crazy then, I might even road-trip home!
     
  2. jcstp

    jcstp Active Member

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    Ok, Tesla open an experience and delivery center in LasVegas
    I am sure the Casinos won't give you trouble giving you temporary accomodations :biggrin:
     
  3. bluetinc

    bluetinc Member

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    Hey Robert,

    I've worked through this idea with Tesla, and because they are not a licensed dealer in Nevada, they can not make use of the waiver on collection of tax for out of state sales delivered in Nevada. The next option is to use Oregon to do the delivery, as there is 0% sales tax on EV's removing the issue entirely.

    Peter

     
  4. teslasguy

    teslasguy MSP P#1117

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    @Robert.Boston This sounds good. We can have a Vegas delivery party and then convoy home to the east coast in our new cars. I'm in!


    P1117 Sent from my iPhone using Tapatalk
     
  5. AndyM

    AndyM Member

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    I have a modest counter-proposal:
    Reassign priority to cars destined for California, Oregon, and Washington, to take most advantage of the I-5 corridor for fast delivery.

    -Andy, selfishly, and on the 2012/2013 cusp, too :biggrin:
     
  6. andystj

    andystj S: P957 X: P337

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    P957 here. I am in total agreement that it would be a nice move for Tesla to assign a couple of enterprising employees to look seriously at getting some of these deliveries booked in a manner consistent with the tax code prior to year end. My understanding in Texas is that we can credit any sales tax paid in California, Nevada or elsewhere against the sales tax due in Texas. Accordingly, assuming the rates are similar for motor vehicles, factory "delivery" followed by gratis transport to Texas could theoretically work. I don't remember the details, but I think I saw here we need a registration date prior to year end for the IRS. So that is a hurdle to consider.

    @bluetinc Are these situations something that Tesla is seriously looking at? If so, is there a person I should buzz on this?

    @Mods Please consider creating a "Year End Delivery & Tax Credit Issues" thread and moving this line over there.

    Thanks,
    Andy



     
  7. teslasguy

    teslasguy MSP P#1117

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    I was told this week that my car will arrive with California temp tags and registration.
    I live in the western burbs of Philly, Pa. Pa has a $3500 tax rebate this year but it requires at least a temp registration to qualify.
    Don't know how they will view a temp Calif. registration.
    Also, I hope this doesn't mean I'm going to be required to pay Calif. sales tax!
     
  8. bluetinc

    bluetinc Member

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    Hey Andy,

    I take it that you mean taking delivery in OR seriously? If so yes, and it looks like I'll be doing this, I'll be sure to let everyone know when this works smoothly. You are close enough to my number that if you are looking to also pickup on the west coast, you will be getting yours about the same time as me (if not prior to me) so you should be able to reference me to validate it with Tesla. If you need a direct contact that I've worked this with just pm me. Oh, I should note, this a full delivery, not a drive it around the block and hand it back to tesla to ship again.

    Peter

     
  9. dsm363

    dsm363 Roadster + Sig Model S

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    I believe you only pay California sales tax if you take delivery in California so you should be good. I'd double check if driving with the California temporary registration is valid in your state as they did this for Texas too but supposedly it wasn't valid here.
     
  10. I=V/R

    I=V/R Member

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    I live in the western burbs as well, and also hoping for delivery this year... I don't see any indication on the PA website ( Alternative Fuels Incentive Grant ) that the program expires in 2012. Rather, it seems like it ends when the allotted rebates run out. Per the site, as of Nov. 19, 2012, 105 EV & PHEV rebates remain at $3,500 each.
     
  11. bmek

    bmek Member

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    We covered this earlier and it was moved to another thread.

    Some considerations in the following:

     
  12. wycolo

    wycolo Active Member

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    > If the customer takes delivery in California and then drives the vehicle back to their home state then it is clear that the sale occurred in California. [bmek]

    Which proves nothing. In my experience States routinely allow sales tax on vehicles to be collected by the State of residence, the State to be issuing Title. Temporary registrations are viewed as a convenience only, so have no bearing. Keep in mind also that many States call it "sales/use" tax, payable to the State where it will be used. The bigger the ticket, the starchier States become.
    --
     
  13. FlasherZ

    FlasherZ Sig Model S + Sig Model X + Model 3 Resv

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    Then you haven't met the Franchise Tax Board of California. :)

    They are, without exception, aggressive about getting their money, whether you live in the state or not. They will attempt to collect taxes on retirement account gains for money you made while working in the state, even if you've moved out of the state years earlier. They will get their money and THEN leave you hanging to deal with your own state with no help.

    To paraphrase the line in Licensed to Drive... "You mustn't f*&k with the [FTB], Mr. Anderson, we can make your life a living hell."


    ...brought to you by an ex-Californian whose tax accountant despises the FTB with passion.
     
  14. aviators99

    aviators99 Model S - R140

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    Yep. I had not been working in California for over a year when they decided that I owed them tax on money they *thought* I earned there. They didn't even bother to figure out where I lived to ask me about it---they just put a tax lien on me and took the money! Took me months to get it back and another year to get it removed from my credit report.
     
  15. Robert.Boston

    Robert.Boston Model S VIN P01536

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    Yep, the transaction definitely has to close outside of California, or we're going to get taxed in CA and then again wherever we actually reside. Oregon could work; I was trying to find the shortest drive from Fremont. Oregon could work, but with most RV campgrounds closed for the winter, driving cross-country from there would be a real challenge. Perhaps Arizona?
     
  16. hcsharp

    hcsharp Active Member

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    Robert I hope Tesla can do something to help you out. It really hurts to do all the right tax planning, only to be foiled by something like this.

    I can't think of anything worse. A line of Teslas all arriving at a charging destination at the same time. It wouldn't be a convoy for very long.

    You won't have to pay CA sales/use tax if it's delivered to you in PA. Also my Roadster arrived with CA temp plates and there was no problem in my home state and I'm pretty sure PA is the same. I think you're safe if they don't run out of $3500 rebates.

    LOL. There are several states competing to have the worst tax department. CA is one of them. NJ is another. VT has won a few battles in this contest.

    I don't know GAAP very well but I don't think it would make that much difference. It's only 8 million in gross profits. I know you want an incentive for Tesla to help with your delivery plan, but not sure it's big enough. OTOH compared to a typical auto mfgr, the cars on trucks might look like inventory that's a long way from being sold. But I don't really know...
     
  17. brianman

    brianman Burrito Founder

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    We need to work on your imagination. :)

    Here's a quick one: The entire line running out of juice 1 mile before the charging station.
     
  18. strider

    strider Active Member

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    You're lucky they just did a tax lien. I had an acquaintance to whom the FTB actually pulled money out of his checking account for the amount they "estimated" that he owed without telling him. He just woke up one morning several thousand dollars lighter than the day before. I worry about what will happen if I ever leave California. Wait, wasn't there a song about that? :p
     
  19. aviators99

    aviators99 Model S - R140

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    No, this *is* what happened. They filed the lien and then the bank took the money out of my account for them.
     
  20. Anzir

    Anzir Member

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    With tax rates going up next year, wouldn't it be better to get the deductions for 2013?
     

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