Any new info about the California Sales Tax?

[wilhelmspencer]

There has been a few conversations here and there about the legislation proposed to exclude out-of-state car sales from the California Sales Tax.

Has anyone heard of recent developments with this? All I can find online is links to a couple forum threads from last year, and that the proposed legislation died.

Would love to pickup my Model 3 at the factory but only if I won't get double charged on sales tax. Maybe if we get a big enough conversation going we can write a letter to someone to try and get this going again.

Thanks.

 

[cpa]

Not to my knowledge.

Use tax

You would be subject to Washington State Use Tax on the purchase of your Tesla in California. You receive a credit in Washington for the sales tax paid to California. Tesla would charge you the California statewide rate of 6 1/2%; there is also a mandatory 1% local rate. I am unclear if an out-of-state purchaser would be subject to this local rate.

So, if your rate up there in the Emerald State is greater than 6 1/2 (7 1/2)%, you would just pay the difference when you register your vehicle.

It is a recurring theme on this site that buyers are afraid to pick up their cars from the factory and drive them home. They think they will be hammered twice with sales tax. This is plain wrong.

Now if you lived in Oregon, that would be another story.

 

[BerTX]

@cpa is correct about the process. Since parts of Washington (including Lynnwood) are some of the few areas with higher sales/use tax than Fremont, CA (9.25%), it can work for you. I would talk to the DMV in WA first! And keep all records of the tax paid in CA, of course.

 

[iwannam3]

In Washington they passed a bill giving sales tax exemption to the first $32,000 of a cars value so buying it in CA , your WA sales tax would be much less that what you have to pay in CA.

"Beginning in July, the sales tax exemption applies to the first $32,000 of the selling price of a qualifying new electric car. That nets a tax savings between $2,600 to $3,100 for electric car buyers depending on where the dealer is located in Washington." (Sales tax rate varies by location)

I got an email from Tesla to see if I was interested in an S or X while waiting for the 3. I urged Tesla to get the law changed, it would promote tourism in CA and seems a win win for everyone. Elon should be working with governor on this. I picked up a Mercedes at the factory in Germany, saved 7% and they did not charge a delivery or destination fee even though it ended up at our local dealership after dropping it off in Amsterdam. I believe the car was imported as "used" so the import duties were less.

 

[melindav]

There has been a few conversations here and there about the legislation proposed to exclude out-of-state car sales from the California Sales Tax.

Has anyone heard of recent developments with this? All I can find online is links to a couple forum threads from last year, and that the proposed legislation died.

Would love to pickup my Model 3 at the factory but only if I won't get double charged on sales tax. Maybe if we get a big enough conversation going we can write a letter to someone to try and get this going again.

Thanks.

the bill that HAD been debated was killed last year. Actually re-written in it's entirety to become about publicly owned land in Santa Clara, CA. All reference to the out of state vehicle buyers exemption was deleted.
CA SB680

 

[wilhelmspencer]

In Washington they passed a bill giving sales tax exemption to the first $32,000 of a cars value so buying it in CA , your WA sales tax would be much less that what you have to pay in CA.

Yeah this is my dilemma. Right now if I were to pick up my car at the factory, I would essentially be canceling out that tax break I would get in WA and just giving normal sales tax to CA instead.

I guess I will wait and see what happens...maybe we tweet Elon about it.

 

[djplong]

It's one trip - with the associated tourism dollars I would have spent - that California doesn't get form me. Living in new Hampshire, we have NO sales tax. I'm not going to pay all that tax for the privilege of picking it up at the factory. I had high hopes of flying out there and road-tripping it back to New England. Not now.

 

[Bimbels]

When the Tesla language was dropped last year, the hope was it would be reintroduced in this year's session, in time for the Model 3. Sadly it appears that did not happen.

 

[melindav]

since the original bill was in the works for well over a year before it wall re-written, there is very little chance another will be introduced that IF passed could accommodate any of the current reservations.

 

[wilhelmspencer]

since the original bill was in the works for well over a year before it wall re-written, there is very little chance another will be introduced that IF passed could accommodate any of the current reservations.

Well...sucks for California. They won't be getting my tourism. Sucks more for me though. I really wanted to make the journey.

 

[Bimbels]

Well...sucks for California. They won't be getting my tourism. Sucks more for me though. I really wanted to make the journey.

Which is exactly why I never understood the opposition. CA was never getting my tax dollars since I live in RI. But they might have gotten my tourism dollars - I'd planned on spending at least a week touring CA in my new Model 3 before heading back east.

 

[wilhelmspencer]

Which is exactly why I never understood the opposition. CA was never getting my tax dollars since I live in RI. But they might have gotten my tourism dollars - I'd planned on spending at least a week touring CA in my new Model 3 before heading back east.

We were going to take the "scenic" route back to Washington as well (Highway 101). Probably spending a couple nights in CA hotels...CA restaurants for food...etc etc....I had it all planned out last year. Too bad.

 

[jbcarioca]

This really is odd. Several EU members (maybe almost all, I don't know) have "tourist plates" that allow buying a new car without VAT or other fees. I have done it in France three times, and once renewed it for a total of 18 months (A BMW Z-1, took a long, long time to get it cleared for the USA since it only was good for EPA and not much else). A friend both a BMW that had TT plates and managed to transfer them to himself. In the part of Europe I know this process is really painless. After import to another country, for me USA, it's a trifle harder but is fairly easy unless you're addicted to exotics that do not meet import standards.

California could make out well here if they allowed any dealer, distributor or manufacturer to do this for any vehicle. There are many that are easy to find in CA, hard to do so in many other places. CA can gain tourism, sellers can gain profits in CA. What's not to like?

FWIW, I did that in France the first time taking delivery on a Peugeot that the owner and I drove to Iran. It came in as a VERY used car so saved a small fortune. Nevada does that, as do many states. Why not CA? How about Canadians, Mexicans, Islanders etc. CA could create a quite nice industry were they to allow it to happen.

 

[Reeler]

It is no secret that California loves tax revenue. It levies almost 15% income tax, which is just about the highest in the nation. So called sunshine tax.

It is no wonder that folks are leaving in droves.

 

[cpa]

It is no secret that California loves tax revenue. It levies almost 15% income tax, which is just about the highest in the nation. So called sunshine tax.

It is no wonder that folks are leaving in droves.

Fifteen percent personal income tax? The highest rate is 11.3%, and Mental Health Services Tax (Rob Reiner Tax) kicks in for AGI over $1,000,000 is 1%. That is a maximum tax rate for incomes over a million bucks of 12.3%.

You get no argument that we have a very high personal income tax rate compared to most states. But the tax rate hyperbole should be toned down.

 

[Reeler]

I stand corrected, it is the highest on the country and tops out at 13.3%: State taxes: California

I am happy to have left California 20 years ago with hundreds of thousands making that same decision each year.

 

[djplong]

California's population is still growing. It's now well over 39 million, a million more than 2 years ago - still above the national rate with a 9% growth rate in the last 10 years (versus 8% nationally) although that reflects some slowing of growth compared to previous decades.

 

[tga]

It's one trip - with the associated tourism dollars I would have spent - that California doesn't get form me. Living in new Hampshire, we have NO sales tax. I'm not going to pay all that tax for the privilege of picking it up at the factory. I had high hopes of flying out there and road-tripping it back to New England. Not now.

Exact same here... Although I'm considering taking delivery in OR (no sales tax) and driving home.

 

[Big-T]

In Washington they passed a bill giving sales tax exemption to the first $32,000 of a cars value so buying it in CA , your WA sales tax would be much less that what you have to pay in CA.

"Beginning in July, the sales tax exemption applies to the first $32,000 of the selling price of a qualifying new electric car. That nets a tax savings between $2,600 to $3,100 for electric car buyers depending on where the dealer is located in Washington." (Sales tax rate varies by location)

I got an email from Tesla to see if I was interested in an S or X while waiting for the 3. I urged Tesla to get the law changed, it would promote tourism in CA and seems a win win for everyone. Elon should be working with governor on this. I picked up a Mercedes at the factory in Germany, saved 7% and they did not charge a delivery or destination fee even though it ended up at our local dealership after dropping it off in Amsterdam. I believe the car was imported as "used" so the import duties were less.

Just to clarify this for other Washington buyers, it only applies to specific EV models with a base MSRP price of $42,500 or less. That means the model 3 will qualify - models S and X do not. Also, the program will run out one month after the state register's it's 7,500th EV which as of the time of the bill was expected to be early 2018. Here's a good write up about it.

EDIT: Here's the DOL link specifying the car models that qualify.

 

[tebling]

Also, the program will run out one month after the state register's it's 7,500th EV which as of the time of the bill was expected to be early 2018. Here's a good write up about it.

I know the subject is about CA sales tax, so at the risk of hijacking further...

For day one reservation holders in WA state, the "early 2018" date here is too close for comfort. This is especially true if you look at the numbers that this is likely based on, which are here. This shows that in the one year period between June 2015 and June 2016, 5013 EVs were registered in WA that presumably would have been eligible under the new law. That new law went into effect on July 1, 2016. So even if the growth rate didn't accelerate, we should be seeing around ~5k cars that got the tax break under the new law by June 2017, and the 7500 cap reached by September. With the growth rate likely higher, it could be even earlier. So I feel like the "early 2018" estimate is way too optimistic.