Destination + Documentation Fee part of Total Vehicle Price

[EVChris]

I'm filling out the web paperwork for my Model 3. Yes, I understand that the $1200 Destination + Documentation Fee is charged regardless of the fact that I'm picking up my car in Fremont. However ...

When I look at the breakdown it says:

It isn't clear but in CA, I don't think the Destination + Documentation Fee would be taxable. Any clarity on this?

 

[EVChris]

Sales tax in CA varies by county and the sales tax in Fremont is 9.25%.
The total vehicle price is $71,700 and the sales tax is $6,632.25.

$6,632.25 / $71,700 is 0.0925. So Tesla is charging sales tax on the destination fee and the documentation fee.

This amounts to $1200 * .0925 or $111.

Tesla is going to fix this.

 

[invalid]

I was thinking that too. Was going to ask tomorrow at my appt, but didn’t want to force the contract to be pulled back so hadn’t already brought it up.

 

[The805]

Sales tax in CA varies by county and the sales tax in Fremont is 9.25%.
The total vehicle price is $71,700 and the sales tax is $6,632.25.

$6,632.25 / $71,700 is 0.0925. So Tesla is charging sales tax on the destination fee and the documentation fee.

This amounts to $1200 * .0925 or $111.

Tesla is going to fix this.

Apparently it's not so clear cut. I called the CA Dept. of Tax and Fee Administration about this. Initial person I spoke with said that if Tesla is using their own private transport to deliver cars to the delivery center they could tax you on the destination charge. However, he wasn't 100% sure and went to ask his supervisor. After that, they offered to transfer me to one of their taxation experts and offered to give me a written opinion. After waiting another 20 minutes, I got disconnected...

There is also an FAQ on the department's website that says the entire purchase price of the car is subject to tax; however, that FAQ seemed to be referring to purchasing a used vehicle.

 

[fnce_prof]

In MI the "delivery" and "doc" fees are completely taxable. They even included a worksheet to make sure the dealers will be forking over the correct amount. When I was buying my Mercedes the dealer even tacked on an "advertising fee" which is again fully taxed (they did comp me some floor mats and free services etc.).

In most states these extra charges are also taxable unless the good is shipped via a "common carrier" e.g. UPS or USPS. The states won't let go of that $150 easily unless you make the clerk at the DMV believe that Tesla mailed you the car via USPS.

 

[EVChris]

Yeah, I worked it out that if Tesla does the delivery then it is in fact taxable. Which begs the question for even having the destination + documentation fee breakout but regardless that doesn't change the answer. Yeah, in CA, it's taxable.

https://www.cdtfa.ca.gov/formspubs/pub100/#applying