jebinc
Well-Known Member
Sales tax is based on where the transaction occurs. Registration fees (like RTA applicability) is based on the address where the car is registered.
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Anyway to avoid paying Seattle area sales tax on a Tesla?
- Thread starter acarney
- Start date
Sales tax is based on where the transaction occurs. Registration fees (like RTA applicability) is based on the address where the car is registered.
From my understanding, in WA, when buying from a dealer it's based on where the transaction happened. At least that's what I've been told by Tesla and my local licensing office. I assume private party might be based on where you live since you would go declare the purchase after the fact and pay the tax due.
Originally the estimate I was given from Tesla was showing ~10.1% tax and had me picking up the car in Bellevue (I think that was the store). When I had it switched to 3rd party transport to my house in the Tri Cities and had a MVPA generated the tax showed almost exactly 8.9% (well, like 8.90000003% or whatever). So.... that appears to be part of the total I've been told to finance/make my final payment on. If that's true then it's saved me 1.2% by having it delivered to me vs picking it up on the other side (West side) of the state...
According to the FAQ PDF https://www.dol.wa.gov/vehicleregistration/docs/faq-altfuleexemptions.pdf they list total price of new vehicle under $45k tax exemption, however it also states total lease payments under $45k as well. If the total lease payment wording is indeed the sum of total payments made over a lease term... seems like a good way to save on sales tax on a car that exceeds $45k MSRP.
Brando
Active Member
OK, this is a second hand story from perhaps 10 years ago.
Washington State - look up the auto sales tax regs
(WAC - Washington Administrative Code - i think)
Fellow bought a new car where no sales tax.
He then took a long vacation - he was retired - National Parks volunteer/jobs - visit relatives.
WHEN he brought this car into Washington - it was considered used - less sales tax.
I don't remember how many days to be considered used - might have only been 90.
Anyway, you get the general idea - you need to research your local laws/regulations on bringing used cars into your home state. And of course, WA State regs could have changed.
(Have family member buy in no sales tax state - then have them sell the car to you as used.
gee - you got a good price on that used car ....)
Of course, this is all second hand as I have NEVER done such a thing
Washington State - look up the auto sales tax regs
(WAC - Washington Administrative Code - i think)
Fellow bought a new car where no sales tax.
He then took a long vacation - he was retired - National Parks volunteer/jobs - visit relatives.
WHEN he brought this car into Washington - it was considered used - less sales tax.
I don't remember how many days to be considered used - might have only been 90.
Anyway, you get the general idea - you need to research your local laws/regulations on bringing used cars into your home state. And of course, WA State regs could have changed.
(Have family member buy in no sales tax state - then have them sell the car to you as used.
gee - you got a good price on that used car ....)
Of course, this is all second hand as I have NEVER done such a thing
OK, this is a second hand story from perhaps 10 years ago.
Washington State - look up the auto sales tax regs
(WAC - Washington Administrative Code - i think)
Fellow bought a new car where no sales tax.
He then took a long vacation - he was retired - National Parks volunteer/jobs - visit relatives.
WHEN he brought this car into Washington - it was considered used - less sales tax.
I don't remember how many days to be considered used - might have only been 90.
Anyway, you get the general idea - you need to research your local laws/regulations on bringing used cars into your home state. And of course, WA State regs could have changed.
(Have family member buy in no sales tax state - then have them sell the car to you as used.
gee - you got a good price on that used car ....)
Of course, this is all second hand as I have NEVER done such a thing
I’ve thought about that but it’s harder when the car is financed. If I had the cash to buy it out right I probably would have family in Oregon buy the car and then “sell it to me cheap” or gift it to me or something. Though I think WA also will look at fair market value, so even if someone sold it for $1 WA may collect tax on it as if it was a $37k car or something (originally was ~$41k from Tesla and depreciated some amount to a fair market value.)
In this case it wouldn’t be worth it to me since there is a sales tax exemption for EV’s. So I would give up $2225 to save $3150 BUT, WA would probably not let me declare the purchase price of $1 and then come back and bill me some amount of tax.
However, the ship to home did save me ~$505 by my 8.9% tax vs Seattle area 10.1%.... plus it’ll show up at my door... hopefully not damaged
jebinc
Well-Known Member
I’ve thought about that but it’s harder when the car is financed. If I had the cash to buy it out right I probably would have family in Oregon buy the car and then “sell it to me cheap” or gift it to me or something. Though I think WA also will look at fair market value, so even if someone sold it for $1 WA may collect tax on it as if it was a $37k car or something (originally was ~$41k from Tesla and depreciated some amount to a fair market value.)
In this case it wouldn’t be worth it to me since there is a sales tax exemption for EV’s. So I would give up $2225 to save $3150 BUT, WA would probably not let me declare the purchase price of $1 and then come back and bill me some amount of tax.
However, the ship to home did save me ~$505 by my 8.9% tax vs Seattle area 10.1%.... plus it’ll show up at my door... hopefully not damaged
WA looks at fair market value, which is lower if you can prove your car was a rental in a prior life.
We appreciate you guys helping us maintain our roads here in Montana but seriously.....
Perhaps you folks should start electing politicians that are averse to punishing local residents for consumption(sales tax) instead of evading the sales tax where you live. A LLC formed to evade local taxes can be a risky decision especially if you decide to drive and store that vehicle in the state where you reside.
People do it all of the time which is why you see supercars and million dollar motorhomes all over the place with Montana plates.
Some states are going after people so you would be wise to get some tax and legal consultation before proceeding.
RV owners who registered in Montana convicted for tax evasion – The Denver Post
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That's exactly why I followed up my post with:
"I wouldn’t listen to me, though. I’d call them and ask questions and possibly call an attorney in my home state and ask if there’s an issue with out of state llc’s operating there."
jebinc
Well-Known Member
For those PNW owners that want to join our regional thread.
Pacific Northwest Owners (Seattle, Portland, or towns/cities in the region)
Pacific Northwest Owners (Seattle, Portland, or towns/cities in the region)
That's the best advice. But I want to remove all tax dodges so it doesn't matter. Just like amazon and google paying hardly any corporate taxes because they book them through Ireland, there's basically no good to society by those clever enough to do this, imho.
You are certainly entitled to your own opinion; however, I tend to agree that there is no moral obligation to pay more taxes than the letter of the law requires. These legal opinions sum it up for me:
Judge Learned Hand:
“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.”
Gregory v. Helvering, 69 F.2d 809, 810 (2d Cir. 1934)
“Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.”
Commissioner v. Newman, 159 F.2d 848, 851 (2d Cir. 1947)
I live in Seattle and my family lives in Coeur d'Alene Idaho, just across the border from Spokane. After talking on the phone with a rep and confirming, I can take delivery at my family's house and get the 6% sales tax rate rather than Bellevue's 10.1%, saving me ~$2,600 in taxes. Then registering it in Idaho is also significantly cheaper, by over a factor of 10.
I don't feel bad about avoiding the taxes either because I drive to Idaho once a month and work remotely there for a few days. There is also the fact that the tax money is all wasted on their garbage programs and corruption.
I don't feel bad about avoiding the taxes either because I drive to Idaho once a month and work remotely there for a few days. There is also the fact that the tax money is all wasted on their garbage programs and corruption.
im.thatoneguy
Member
"I didn't feel bad robbing Solmor's house. He isn't using any of it because he supposedly lives in Idaho so he's not using it. Also he's committing tax fraud so he's effectively stealing from me."
jebinc
Well-Known Member
I obviously am not advocating avoiding legitimate tax... but for someone having to pay Seattle area tax when they live on the other side of the state, just because that’s where Tesla decided to build their store... that’s a bit frustrating.
Right, I just wanted to make clear that my suggestion was for people that actually lived outside Seattle.
there is probably a very interesting discussion about city vs county vs state vs federal taxes and how historically a city tax in Seattle would almost never impact someone in Richland, yet now it’s not at all as uncommon. It would probably have many similarities to robotaxis and the internet and how things are handled in these places. Essentially, the boundaries of authority and space don’t align as well as they used to.
but maybe not for this forum.
Just want to make it clear that I live a suburb of Seattle (~3w/mo) and a town in northern Idaho(~1w/mo). My current car, drivers license, voter registration, etc are all in Idaho still.
Uncle Paul
Well-Known Member
Always a problem if you get pulled over with a Drivers License from one State, but your car is registered in another.
In California you only have 10 days to register vehicles here, if moving it from another State.
In California you only have 10 days to register vehicles here, if moving it from another State.
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