Delivery Nightmare

[cb17]

To start with, I'd like to say that my wife and I have been S85 owners since 2013. We have a Model 3 pre-order (I waited in line to be one of the first), and were hoping to add a Model X to our family today. That didn't happen. We are at a total dead end and have no idea what else to do outside of taking legal action. Hence this post.

About a month ago, I found out I was being transferred out of state (I'd like to leave out personally identifying specifics for now). My transfer is set for the end of March. After doing a little research, I found out that if I took delivery in my current state, I'd not only be charged sales tax in my current state, but then be charged basically the equivalent to standard sales tax as part of registration (basically like a VAT) in my soon to be new state three weeks after delivery. Needless to say, being double charged sales tax was not an option.

So upon finding this out, I spoke to my salesperson before the car left the factory (as far as I'm aware). He did a little research and told me we could take delivery in Las Vegas and then would have 30 days to register in our new state. Two days before we were supposed to pick up the car, we find out that's a total lie. Our delivery specialist told us we had two options: take delivery as residents of our current state or we would need to pay to have it shipped to the new state. I should mention, we only found this out after my wife had booked a plane ticket and non-refundable hotel for Vegas as well as planned to have her sister meet her there who was otherwise not going to (for logistics reasons on our end).

So, obviously, we're mad, but just trying to be pragmatic and finish the delivery. So we ask, "hey my sister-in-law is going to be with my wife and she's from our new state, can she be on the title and register the car?". We were told "No because she would need to be on the loan due to Tesla financing partners policies, however we might be able to get third party financing that would allow it" (after a lot of back and forth). We fought that for a long time because the interest rate is so much higher by third parties. However the day of the delivery, we finally conceded and found a financier who would do it. That's today.

Today my wife walked into the service center, and they wouldn't give her the car. They told her it doesn't matter if it's a third party financier, my sister-in-law would still need to be on the loan. This makes no sense, because to Tesla it's just a check. But by this point, my wife was exhausted and just left. And now we're out a $2500 deposit and no car. We're also out a lot of expenses for the trip and it's going to make our move significantly more complicated (for all kinds of reasons that are probably not worth explaining).

I've tried tweeting Elon and @teslamotors to no avail. [email protected] isn't responding and ownership@ is no longer active. If anyone has any suggestions, I would love to hear them.

Sorry for the long post, I hate doing it, but have no idea where else to turn. It's kind of unbelievable the service (or lack thereof), we're receiving when trying to by a car that costs well over $100k, especially as existing and future customers.

Anyways, thanks so much for reading!

 

[Tam]

Sorry to hear about the bureaucratic process.

I wouldn't call bad service.

Tesla did their best to help you out with the changing scenarios.

It seems to get more complicated to accommodate for

1) Change of delivery locations
2) dealing with sales taxes, registrations with different locations
3) Legal title with owner name only as in cash or with financing company's name as well.

You might need an accountant or a lawyer to sort it out.

 

[karupspc]

Why are you in such a rush to register the vehicle in the new state? Take delivery of the vehicle in your current state and register it there. Have your mail forwarded to your new state. Once you've settled into the new state then register it.

 

[cb17]

Sorry to hear about the bureaucratic process.

I wouldn't call bad service.

Tesla did their best to help you out with the changing scenarios.

It seems to get more complicated to accommodate for

1) Change of delivery locations
2) dealing with sales taxes, registrations with different locations
3) Legal title with owner name only as in cash or with financing company's name as well.

You might need an accountant or a lawyer to sort it out.

Not sure how "a salesperson lying to a customer causing them to spend a lot of their own time and money and then refusing to help correct their own (Tesla's) mistake" qualifies as "Tesla doing their best"

 

[cb17]

Why are you in such a rush to register the vehicle in the new state? Take delivery of the vehicle in your current state and register it there. Have your mail forwarded to your new state. Once you've settled into the new state then register it.

Even if that weren't illegal in the new state (law is 30 days from first time it's in the state), it wouldn't solve any problems. We'd still be paying both taxes.

 

[ZERO260]

You might be able to write off both state sales tax on your federal tax return. In some states you have a choice of writing off sales tax or state income tax. Usually it's advantageous to go the income tax route. In your case writing off both sales taxes might be better.

I feel your pain.

 

[bonaire]

Why are you in such a rush to register the vehicle in the new state? Take delivery of the vehicle in your current state and register it there. Have your mail forwarded to your new state. Once you've settled into the new state then register it.

Some states have silly laws upon entering the state and registering. The right thing to do in this case is pay the stupid tax (ie. for not planning well) and pay the tranfer fee of what looks to be $2000 to ship to the new state and take initial delivery there.

 

[Aljohn]

Sorry to hear about all the missteps. However, my experience has always been the person(s) on the title must match the loan. This is due to the Lien on the vehicle. The financing company require the dealer to ensure that the vehicle is not titled (and therefore can be sold) by other than the Loan (lien holders). Since a number of states (under the auspiciousness of not raising tax) converted their Vehicle sales taxes to Ad Valorem tax of title fee, it may not be recognized or offset by sales tax, title tax in other states. It's is basically States want the revenue game. This is one reason Not to elect Factory Delivery, if not a resident of California.

I hope you can find a solution that works for the two states involved.

 

[NikeWings]

The car is the collateral for your loan. If your sister in law is on the title, without being party to the loan on the vehicle, it would impair the Lender's right to the collateral, in the event of default by the Borrower. This is not so much a Tesla policy as it is a Lender policy to protect themselves, and you.

Having anyone on title without co-signing for the loan, is no different than you simply buying that person a car. They could keep it or sell it, and you'd be responsible for the loan. If you stop paying the loan, the Bank can not repossess the car, but they would for certain come after you.

When I've been relocated, the relo packages always picked up new registrations, licenses or fees etc. not incurred if I did not move for the Company. Or at least a lump some to absorb such expenses incidental to the move. Maybe check with your employer?

 

[sharag]

As far as I know, you pay sales tax on a car only once. Registration has to be done within 30 days of moving to a new state, but registration is only a couple hundred dollars, its the sales tax that is expensive.

 

[andrewket]

Why are you in such a rush to register the vehicle in the new state? Take delivery of the vehicle in your current state and register it there. Have your mail forwarded to your new state. Once you've settled into the new state then register it.

Many states have a law/regulation that states if you are registering a car that has been purchased less than 365 days prior that they will collect sales tax as if the car was just purchased. This is stop people from buying out of state with a different address and then transferring a car to avoid a higher tax rate. However, in most cases the second state will deduct any taxes paid to the first state, so it's only a problem if the second state as a higher tax rate, and even then you just owe the difference.

cb17 - I think it would help if you told us which states are involved. You mentioned Vegas (Nevada) which make me think you're a California resident, but you're moving to a third as-of-yet not mentioned state. I'm pretty sure Nevada does in fact still allow an out of state resident to take delivery of a car and NOT pay taxes to Nevada (you're exempt). You'll have to get an x-day "drive away permit" so you can legally drive the car, and then you will register the car in your home state and pay the sales tax to that state. I did this many years ago, but it's possible the law in Nevada has changed. You may also be running into a Tesla POLICY problem. Just because the state allows it, it's possible Tesla isn't equipped or doesn't want to handle "out of state" buyers at their Nevada SC. Given the proximity to California, I could see this as being a scaling problem for them.

 

[andrewket]

Even if that weren't illegal in the new state (law is 30 days from first time it's in the state), it wouldn't solve any problems. We'd still be paying both taxes.

I'm replying here a bit out of order, but see my other response. This is almost always not the case. Almost all states will deduct taxes paid to another state. California is one of the big exceptions.

If you're currently a California resident and you register and pay taxes there, your new state will more than likely deduct the taxes paid in California when calculating their taxes due. Since California has one of the highest tax rates, you would not owe any additional tax. Now of course, with you moving so soon, I would be looking to not pay California, and just register the car in my new state directly, which likely has a lower tax rate. So what you're really trying to save yourself is the difference in taxes between California and whatever the other state is, and not double taxation.

 

[Tam]

Not sure how "a salesperson lying to a customer causing them to spend a lot of their own time and money and then refusing to help correct their own (Tesla's) mistake" qualifies as "Tesla doing their best"

I assume your salesman is not an expert in sales tax for a variety of states, registrations, titling in different scenarios because he had to do "research".

Your salesman is not an accountant or tax expert.

Yes, it is Tesla's mistakes to give you a wrong answer.

But It is also your mistake to rely on a non-expert.

 

[InsaneDriver]

Sure seems like you are trying to make your problem Tesla's problem. I don't see any legal action opportunity because you are moving. Tesla didn't have anything to do with that.

You obviously feel misled by the Tesla Delivery Center, but seems like the right approach would have been to speak directly with the motor vehicle department in each of the impacted states to understand your options directly from those who deal with this everyday.

I certainly understand and the frustration, the wait to get an X and then to have everything go sideways in the 9th inning.

Certainly wish you luck with a positive and quick resolution.

 

[cb17]

Sorry to hear about all the missteps. However, my experience has always been the person(s) on the title must match the loan. This is due to the Lien on the vehicle. The financing company require the dealer to ensure that the vehicle is not titled (and therefore can be sold) by other than the Loan (lien holders). Since a number of states (under the auspiciousness of not raising tax) converted their Vehicle sales taxes to Ad Valorem tax of title fee, it may not be recognized or offset by sales tax, title tax in other states. It's is basically States want the revenue game. This is one reason Not to elect Factory Delivery, if not a resident of California.

I hope you can find a solution that works for the two states involved.

We found a third party financier who would allow us to do it and they still wouldn't take it.

Many states have a law/regulation that states if you are registering a car that has been purchased less than 365 days prior that they will collect sales tax as if the car was just purchased. This is stop people from buying out of state with a different address and then transferring a car to avoid a higher tax rate. However, in most cases the second state will deduct any taxes paid to the first state, so it's only a problem if the second state as a higher tax rate, and even then you just owe the difference.

cb17 - I think it would help if you told us which states are involved. You mentioned Vegas (Nevada) which make me think you're a California resident, but you're moving to a third as-of-yet not mentioned state. I'm pretty sure Nevada does in fact still allow an out of state resident to take delivery of a car and NOT pay taxes to Nevada (you're exempt). You'll have to get an x-day "drive away permit" so you can legally drive the car, and then you will register the car in your home state and pay the sales tax to that state. I did this many years ago, but it's possible the law in Nevada has changed. You may also be running into a Tesla POLICY problem. Just because the state allows it, it's possible Tesla isn't equipped or doesn't want to handle "out of state" buyers at their Nevada SC. Given the proximity to California, I could see this as being a scaling problem for them.

I'm replying here a bit out of order, but see my other response. This is almost always not the case. Almost all states will deduct taxes paid to another state. California is one of the big exceptions.

If you're currently a California resident and you register and pay taxes there, your new state will more than likely deduct the taxes paid in California when calculating their taxes due. Since California has one of the highest tax rates, you would not owe any additional tax. Now of course, with you moving so soon, I would be looking to not pay California, and just register the car in my new state directly, which likely has a lower tax rate. So what you're really trying to save yourself is the difference in taxes between California and whatever the other state is, and not double taxation.

The new state is in Georgia.

Directly from their website
I am a Georgia resident but I plan to buy a car in another state. Will I be required to pay TAVT when I title this motor vehicle in Georgia?

• Yes.

I assume your salesman is not an expert in sales tax for a variety of states, registrations, titling in different scenarios because he had to do "research".

Your salesman is not an accountant or tax expert.

Yes, it is Tesla's mistakes to give you a wrong answer.

But It is also your mistake to rely on a non-expert.

Sure seems like you are trying to make your problem Tesla's problem. I don't see any legal action opportunity because you are moving. Tesla didn't have anything to do with that.

You obviously feel misled by the Tesla Delivery Center, but seems like the right approach would have been to speak directly with the motor vehicle department in each of the impacted states to understand your options directly from those who deal with this everyday.

I certainly understand and the frustration, the wait to get an X and then to have everything go sideways in the 9th inning.

Certainly wish you luck with a positive and quick resolution.

To those saying we should have checked with local state governments, this is not a government problem. This is a Tesla policy problem. They're saying their "contracts" person wouldn't write the contracts for the car without a Georgia driver's license. It would be perfectly legal for them to give us the car with our current driver's licenses as someone else mentioned earlier.

 

[Tam]

...not a government problem...

I don't think your salesman lied to you when he tried his best to evade California car sales tax by planning to deliver your car to Las Vegas.

Your salesman is just not familiar with how very difficult it is to evade California car sales tax when you still have a California Driver License.

1) Fees:

There are 3 kinds of fees of concern here:

State Car Sales Tax

State Title Fee

State Car Registration Fee


The question is: how can you avoid paying a duplication of the above.

Some non-California residents have been picking up their cars at the factory and paying both California car sales taxes as well as their own state car sales tax. Some states don't charge EV car sales tax so they don't have to pay a duplicated tax but it is supposed to be free from them in the first place.

It looks like Georgia combine both Car Sales Tax and Title Fee into one single fee of 6.5% of your car value no matter where you got your car.

2) "Contract":

I think many states are very strict about tax evasions by buying cars in a tax-free location or a place that has lower tax rate than your home address, thus, it's possible that Tesla has to do paperwork/contract according to your driver license.

 

[cb17]

2) "Contract":

I think many states are very strict about tax evasions by buying cars in a tax-free location or a place that has lower tax rate than your home address, thus, it's possible that Tesla has to do paperwork/contract according to your driver license.

After many many conversations, my understanding is that this decision is entirely at Tesla's discretion.

 

[andrewket]

So it does seem that you're in a bad place. California's tax is a sales tax, whereas Georgia is a title tax. You end up giving money to the state either way, but because they are different, Georgia won't give you credit for taxes paid to California. It could be worse; in Virginia you pay sales tax at the time of sale AND a personal property tax every year.

Your two options as I see it are 1/ take delivery in a state that allows tax exemption and a drive-away permit (I believe Nevada offers this) - with Tesla's cooperation, or 2/ Take delivery in Georgia.

You might look up the rules governing DMV dealer licenses in Nevada. It's possible Tesla is legally obligated to allow you to buy the car in Nevada. They're not legally obligated to sell you a car... but if they have a dealer license they are likely required to fulfill all the requirements thereof.

Either way, imho you are far more likely to get Tesla's assistance if you remain calm and ask them nicely for help. Don't cast blame.

A

 

[Nosken]

Hopefully, the form link below will give you all the information you need.

Years ago, my parents had a car delivered from a Sacramento dealership in Reno Nevada, and had a notary at the casino concierge desk effect the transaction.

This is a trick that RV people used when they travel extensively. The law used to let you keep the car out of state three of the first six months but it was changed years ago. A California resident was able to use this technique and even get California registration. It appears to have changed dramatically.

http://www.boe.ca.gov/pdf/boe448.pdf

From the form, this may be helpful.
Please note that if you are a California resident and this vehicle is brought into California for any reason, other than qualifying warranty or repair service, within 12 months after its purchase, it shall be presumed that you have purchased the vehicle for use in California and you may owe California use tax. If use tax applies, you must pay it directly to the State Board of Equalization (BOE). If you are a nonresident and this vehicle is brought into California within 12 months of its delivery to you and is used or stored in California more than one-half the time during the first 12 months of ownership, or is subject to registration in California within 12 months of its date of purchase, it shall be presumed that you have purchased the vehicle for use in California and use tax may apply. If use tax applies, you must pay it directly to the BOE. It is important that for the first 12 months of ownership, you obtain documentary evidence of the place of use of this vehicle (for example, proof of registration in another state, gas and/or service receipts, credit card statements, check registers, travel logs, lodging, or campground receipts, etc.). Because the BOE may have up to eight years to determine whether your vehicle was actually purchased for use in California, you should retain records for at least eight years showing your out-of-state use during the first 12 months after your purchase. For more detailed information, please contact the BOE’s Taxpayer Information Section at 800-400-7115 or the BOE’s Consumer Use Tax Section at 916-445-9524. You may find forms and publications on our website at www.boe.ca.gov.

 

[andrewket]

Mosken seems to have given you the golden ticket, as long as you keep the car out of California for 12 months.