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Do you have to pay CA state sales tax?

Discussion in 'Tesla Motors' started by ahimberg, Oct 12, 2011.

  1. ahimberg

    ahimberg Member

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    For EV Sales tax incentives (like WA state),

    anyone know if we'll be able to take delivery in CA and still get this incentive -- or I'd then get hit with CA sales tax?
     
  2. Mycroft

    Mycroft Life happens

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    If you register it in CA, then you'll pay CA taxes at that time. But if it's delivered to CA for registration in WA, then there would be no CA taxes.
     
  3. ckessel

    ckessel Active Member

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    #3 ckessel, Oct 12, 2011
    Last edited: Oct 12, 2011
    Yea, I'm trying to figure this out right now actually. Whether or not a state allows you to skip sales tax for out of state residents apparently varies by state. I'm trying to find CA's actual laws on it. I'm also trying to figure out about the "destination/delivery charge". Normally it's not negotiable as dealers get charged by the manufacturer, but in Telsa's case they're the same entity.

    If I, as an Oregon resident (no sales tax) take possession right from the factory, if Tesla will allow that, I'm wondering if I can:

    - Skip the destination charge (or pay a much smaller one)
    - Skip CA sales tax

    I thought it'd be fun to take delivery from the factory and make a road trip of it back to Portland, OR. But only if I could avoid the above two charges, otherwise I might as well have them bring it to me.

    Edit: Well, shoot, in their infinite wisdom apparently California won't waive sales tax for the buying of goods for residents of states without it (unlike Washington, which does). Rather than encourage me to come to California, spend money on food, drink, and a general vacation (which, as non-goods I would pay tax on) while I pick up the car, California has decided to discourage me from visiting at all. Silly, silly politicians.
     
  4. Mycroft

    Mycroft Life happens

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    I'm pretty sure that cars are different ckessel. The dealer collects the sales tax, but only if you register it in CA. If the dealer sends the registration paperwork to OR or WA, then there's no tax for them to collect. You could call a normal auto dealership in CA and ask them about it.
     
  5. ckessel

    ckessel Active Member

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    After a bunch of web searching, I'm pretty convinced you can't escape the CA sales tax if you take delivery in CA. I actually hunted down the state rep for the Fremont area, Ellen Corbett, and tried to use her "Contact Me" section of her website to suggest she might propose a sales tax waiver for Tesla cars taken delivery at Fremont. Sort of encouraging a specific type of tourism. Unfortunately, I have no idea if she'll get the message because hitting "Submit" on that webpage doesn't seem to do anything....
     
  6. Lloyd

    Lloyd Active Member

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    There are several ways you can do this transaction. 1. Tesla delivers the car to the final state for you. 2. You can take an "extended test drive" with a tesla employee in the car, and then finalize the transaction when you cross the border. 3. You can hire a transporter with Tesla as part of the sale to pick up the vehicle and deliver it to the final state.

    California sales tax becomes due if you take posession in California, and Tesla will not allow you to drive an unsold vehicle due to liability etc.
     
  7. ckessel

    ckessel Active Member

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    I'm sure Tesla will deliver it to Oregon and there's no issue with having to figure it out. The point was to make a fun road trip out of buying the car and taking delivery right near the factory. CA's sales tax squashes that thought. Seems dumb on CA's part to discourage out of state people from buying big ticket items in CA.
     
  8. Lloyd

    Lloyd Active Member

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    #8 Lloyd, Oct 12, 2011
    Last edited: Oct 12, 2011
    You're right it would make sense. Spend a day in the city and drive your new car home! California is a tough state for taxes, and the department of Equalization (sales tax) is the worst. I've got stories but won't bother you with those. Perhaps Tesla could lobby for an exemption to allow this to occur only for vehicles picked up by owners from the factory. Give a 30/60 day registration for a fee of $50. This is what they charge currently for a 60 day smog test exemption. It would save the owners a delivery fee, and promote tourism for California, and allow California to make a little money for their trouble on the registration which they would not have recieved anything for otherwise. Deliveries would be easier and simplier at a centralized location(s) for Tesla.
     
  9. ahimberg

    ahimberg Member

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    too bad, I was thinking about vacation in California with a slow trip up to Seattle... we'll see if Tesla can change anything in the next year before delivery
     
  10. Mycroft

    Mycroft Life happens

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    Wow, talk about crazy bad taxes. This one takes the cake!
     
  11. richkae

    richkae VIN587

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    In july 2009 I received word that my roadster was going to be put on a truck in 2 days and it would be delivered to me in washington state 7-10 days after that. I wasn't interested in waiting for the truck.
    I took the sales paperwork to the state office that provides the sales tax waivers for EVs. They said something about usually not granting it until after you have the car but I told them I was taking possession in the next 24 hours. Then I took the waiver to the DMV office and got plates.
    The next morning I flew to San Francisco airport ( with license plates and a 40amp capable RFMC charge cord in my carryon ) and took a cab to Menlo Park.
    At Menlo Park I installed the plates and drove it home to the Seattle area.
    I wrote about the trip here A split second decision. | High Speed Charging

    So the answer to: "do you have to pay CA state sales tax?" is no.
     
  12. Mycroft

    Mycroft Life happens

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    Cool! So were you able to skip out on the destination charges?
     
  13. ckessel

    ckessel Active Member

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    I'm curious how that worked as my reading of the CA BoE laws implies that sales tax is required if you take possession in CA and further that the seller has some liability if they don't collected it (unless it's a private party sale, then other laws apply to get the tax paid). Obviously you did it, but I'm not sure it doesn't violate the CA laws. What did you file with CA to show sales tax wasn't due?
     
  14. Lloyd

    Lloyd Active Member

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    I don't think he voilated CA law, it's just unusual to be able to get plates and complete your registration of a vehicle in another state, without having completed the sale of the vehicle, and taken posession.
     
  15. ckessel

    ckessel Active Member

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    #15 ckessel, Oct 13, 2011
    Last edited: Oct 13, 2011
    I'm definitely not a lawyer, but after a few hours of reading CA BoE website pages, I can't find anything that would exempt this from the sales tax. The laws specifically talk about out of stale sales not paying the tax if the item is transported out of state by a company "typically in the business of transporting", which prevents the "I'm doing the transporting" angle.

    That's why I'm curious what Rich did in the way of paperwork with CA. The seller, Tesla is required to pay the tax, though not required to collect it from Rich. I suppose Tesla might have eaten it, but that seems unlikely.

    Edit: The CA BoE has a "contact us" page and I submitted the question to them about how I can get a CA sales tax exemption if I pick the car up in CA.
     
  16. Mycroft

    Mycroft Life happens

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    It's possible that on paper, Tesla delivered the car to him via the Seattle store.
     
  17. ckessel

    ckessel Active Member

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    The California BoE got back to me with links rather than an answer, links I've already read. There isn't any clause that I can find that would allow someone to take delivery in CA without paying sales tax. I suspect richkae actually owes the tax, but the BoE just isn't aware of it. Maybe Tesla will get enough questions about it as delivery nears that they'll have a tax lawyer find a loop hole.
     
  18. richkae

    richkae VIN587

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    I retract my previous statement issuing an opinion on the tax - and it was all a thought exercise or perhaps a dream, certainly a work of fiction ...

    I don't think the Seattle store was open yet. I paid for the delivery charge exactly the same same as everyone else who had the car delivered to them by truck - therefore my car must have been delivered by truck.
    When getting the plates I was not asked where I was taking possession.
    I will remain blissfully ignorant.
     
  19. ckessel

    ckessel Active Member

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    Absolutely ;)
     
  20. bluetinc

    bluetinc Member

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    Ok, so I'll take my own shot at this, in an attempt to keep everything on the up-and-up, and because I am really looking forward to also picking up my car in CA and driving it home without these painful issues:

    According to State of California - BOARD OF EQUALIZATION - SALES AND USE TAX REGULATIONS - INTERSTATE AND FOREIGN COMMERCE -
    Regulation 1620 (http://www.boe.ca.gov/pdf/reg1620.pdf)
    "If title to the property sold passes to the purchaser at a point outside this state, or if for any other reason the sale occurs outside this state, the sales tax does not apply, regardless of the extent of the retailer’s participation in California in relation to the transaction."

    and

    Because Richkae received tags from his DMV, I take it to mean that he had the title to the property, and as such the title passed to him in WA, therefore CA sales tax does not apply.

    Thoughts?

    Peter
     

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