California Purchase Laws my have just ruined my MS85 AP1 purchase!

[T34ME]

To get around this, some car dealers for other makes will deliver to just over the border for OOS buyers.

True, and it works the same for boats and airplanes in California. While working in the yacht building business we had some buyers who wanted us to deliver their boat in International waters (three miles offshore) so they could take their boat to Ensenada, 60 miles south of the border, to avoid paying California use tax if they left it there for 180 days. We called it "the hundred eighty day yacht club." The State got wind of the scheme and started cracking down by changing the rules. We did not cooperate with this 'creative tax planning' because the last thing we wanted as a company was the State Franchise Tax Board coming down on us like a ton of bricks for being participants aiding and abetting tax evasion.

 

[LCR1]

Why would you pick it up in California? free shipping and pick it up at the Tempe, AZ center and be done with it. That's what my salesman told me to do on the last one before Harvey hit(as a result of Harvery shipped free to Houston from the West coast)

 

[NateGordonJr]

I had the exact same scenario when I bought my CPO earlier this year - car was in Cali and the initial choice was to either pay the additional CA tax or pay the $2000 delivery to St. Louis. After chatting with my OA, the solution was to come up with a closer destination that was still in the 'free' delivery region (basically, how far East would they ship it for free?) and then drive the car back myself - which ended up being Phoenix - thus avoiding both the CA tax, and the delivery charge. I would suggest bringing this up with your OA, as PHX would be even closer to TX than CA, and you get a sweet road trip out of it (we enjoyed driving through Sedona etc on the way back). The crew at the PHX (technically Tempe) SC were great to work with there as well.

Just to clarify (because you may very well mean 2018), did you take delivery between 1/1/18-1/3/18? Or did you actually mean in 2017? I asked the OA about moving the car to a 'free' delivery region and catching a flight to take delivery and she said it would still cost $1,000 for them to ship it from Fremont. So I feel as though they've changed their policies to prevent circumvention. Because I too, like you, would enjoy that road trip back home!

 

[Zorg]

Just to clarify (because you may very well mean 2018), did you take delivery between 1/1/18-1/3/18? Or did you actually mean in 2017? I asked the OA about moving the car to a 'free' delivery region and catching a flight to take delivery and she said it would still cost $1,000 for them to ship it from Fremont. So I feel as though they've changed their policies to prevent circumvention. Because I too, like you, would enjoy that road trip back home!

What about Reno? It is 4 hours from Fremont.

 

[NateGordonJr]

Why would you pick it up in California? free shipping and pick it up at the Tempe, AZ center and be done with it. That's what my salesman told me to do on the last one before Harvey hit(as a result of Harvery shipped free to Houston from the West coast)

California was definitely not my choice, heck I'd love to pick it up down the street at the local SC but not for $2k. And as I've said in previous replies, I feel as though Tesla must have changed some policies recently because I specifically asked the OA about moving it to the nearest location with 'free shipping' and was informed they don't do that, and it'd be $1,000 for them to move it at all.

 

[T34ME]

You conflating issues. Fact is that we never collect sales tax from OOS car buyers because they don't take delivery here.

Never said California collects taxes from buyers who purchased and delivered out of State. Fact is many people want to take delivery in California, under the lights, barista coffee, factory tour, and enjoy a mid 70's California winter while it is sub zero in their home State........all the while using our State highway system without paying any taxes at the gas pump because it is an EV.

If we were smart, we would not tax those purchases and instead would get a tourism boost from those buyers coming here to pick up their cars. German car makers so it all the time.

California's tourism business is very robust already. I am happy to see that we are increasing (doubling) the gas tax for infrastructure repair so that all those out of State tourists will pay their fair share for maintenance of our highway system.

What German automaker has a backlog of 500K reservations? And Germany collects a total tax rate higher than California.

 

[drewg123]

Speaking of CA tax grabs.. I got hit with a surprise this year.

I work for a bay area tech company, but work out of my house in Virginia. We remote employees were informed late this year that if we spent more than 14 working days on travel in CA, our company would do CA withholding for the number of days we spent in CA & we'd have to file a CA return. So I now have the hassle of filing a CA state return for 2017. Several of us will be careful to keep our time in CA to less than 14 days going forward, and CA will loose out on a lot of spending.

Apparently NY also does this. It seems very penny-wise and pound-foolish.

 

[Zorg]

Never said California collects taxes from buyers who purchased and delivered out of State. Fact is many people want to take delivery in California, under the lights, barista coffee, factory tour, and enjoy a mid 70's California winter while it is sub zero in their home State........all the while using our State highway system without paying any taxes at the gas pump because it is an EV.

California's tourism business is very robust already. I am happy to see that we are increasing (doubling) the gas tax for infrastructure repair so that all those out of State tourists will pay their fair share for maintenance of our highway system.

What German automaker has a backlog of 500K reservations? And Germany collects a total tax rate higher than California.

The point being that OOS buyers don't take delivery in CA anyway so we don't collect the tax anyway. That's the point.

Germany doesn't charge you VAT when one buys a BMW with Euro delivery. The size of the backlog is irrelevant to the tax issue.

 

[LCR1]

Speaking of CA tax grabs.. I got hit with a surprise this year.

I work for a bay area tech company, but work out of my house in Virginia. We remote employees were informed late this year that if we spent more than 14 working days on travel in CA, our company would do CA withholding for the number of days we spent in CA & we'd have to file a CA return. So I now have the hassle of filing a CA state return for 2017. Several of us will be careful to keep our time in CA to less than 14 days going forward, and CA will loose out on a lot of spending.

Apparently NY also does this. It seems very penny-wise and pound-foolish.

CA has always had this issue. It sucks for military contractors(active duty and spouse is exempt) and athletes. When the Superbowl (or any game/sport) was in Cali players were there for like 4 days and had to pay 4/365 taxes on 100% of the years earnings.

 

[LCR1]

Heard back from the OA I used and yep, it's a new policy. either 1K to Vegas or 2K for the full ride to Texas.

 

[T34ME]

The point being that OOS buyers don't take delivery in CA anyway so we don't collect the tax anyway. That's the point.

And they don't use the State highway system and infrastructure, which is the point you are missing.

Germany doesn't charge you VAT when one buys a BMW with Euro delivery.[/QUOTE]
Germany does get it all back on very high ancillary taxes on everything from soup to nuts. Have you priced a ticket on Lufthansa recently?

The average out-of-State buyer would have to spend around $50,000 on tourism to generate the same amount of use taxes to offset the amount of lost revenue from not collecting use taxes on a model 3. The average out-of-State Tesla tourist might generate, at most, a $200 in use taxes in a three or four day stay.

 

[Zorg]

The average out-of-State buyer would have to spend around $50,000 on tourism to generate the same amount of use taxes to offset the amount of lost revenue from not collecting use taxes on a model 3. The average out-of-State Tesla tourist might generate, at most, a $200 in use taxes in a three or four day stay.

I understand the math but all we're getting is 9% of $0 right now.

 

[dmode]

I think it is a stupid to tax out of state folks who purchase their cars here and drive it back. Should be changed. But the fact is so few people are affected by it that no one really cares to change it.

 

[T34ME]

I understand the math but all we're getting is 9% of $0 right now.

And saving 9% in the cost of doing business.

 

[whitex]

You can do that, but a tesla employee will need to go with you, it must be on a dealer plate, and the car would be on their insurance until the sale is completed. Tesla is not likely to agree.

CA has always had this issue. It sucks for military contractors(active duty and spouse is exempt) and athletes. When the Superbowl (or any game/sport) was in Cali players were there for like 4 days and had to pay 4/365 taxes on 100% of the years earnings.

Then why can't they just charge pro-rated sales tax on cars delivered in CA? Cars last for 12 years of the car, so if calculate the 2-3 days out of 12 years and take that portion of the sales tax. For road taxes, sell temporary registration (also prorated).

 

[Zorg]

And saving 9% in the cost of doing business.

Well, there you have it. Enjoy your savings.

 

[T34ME]

Then why can't they just charge pro-rated sales tax on cars delivered in CA? Cars last for 12 years of the car, so if calculate the 2-3 days out of 12 years and take that portion of the sales tax. For road taxes, sell temporary registration (also prorated).

There is a substantial cost for enforcement, administration, and policing of this kind of policy, more than would be collected from a complicated plan. As of 1/1/18 California has raised their minimum wage to $11 per hour which is, I believe, the highest in the nation. Some cities in California even have higher rates, $15 per hour. The high wages in California coupled with the high tax rate leads to a robust economy with a generally happier population. Most States and the Federal government haven't figured that out yet.

 

[Lloyd]

Speaking of CA tax grabs.. I got hit with a surprise this year.

I work for a bay area tech company, but work out of my house in Virginia. We remote employees were informed late this year that if we spent more than 14 working days on travel in CA, our company would do CA withholding for the number of days we spent in CA & we'd have to file a CA return. So I now have the hassle of filing a CA state return for 2017. Several of us will be careful to keep our time in CA to less than 14 days going forward, and CA will loose out on a lot of spending.

Apparently NY also does this. It seems very penny-wise and pound-foolish.

Also, be careful with the exact amount of time that you spend here. I am aware of several people attempting to claim out of state residency, and they were able to access cell phone records to prove that they were in CA more than 6 months to force payment of income taxes.

 

[Lloyd]

Then why can't they just charge pro-rated sales tax on cars delivered in CA? Cars last for 12 years of the car, so if calculate the 2-3 days out of 12 years and take that portion of the sales tax. For road taxes, sell temporary registration (also prorated).

Allowing a temporary registration is what was proposed but voted down by our legislature. They want it ALL!

 

[LCR1]

Also, be careful with the exact amount of time that you spend here. I am aware of several people attempting to claim out of state residency, and they were able to access cell phone records to prove that they were in CA more than 6 months to force payment of income taxes.

Link to something on that? That seems to be really stretching what I'm comfortable a government doing.