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EAP Sales Tax if purchased later?

jgd108

Member
Jun 13, 2017
376
210
orange county
Hi!

I'm not getting clear answers from searching the forums so let me ask owners of M3 in California who didn't buy EAP while ordering their car:
If you go and try to enable / purchase EAP for 6k, is that including sales tax?

Secondary to this, any implications with insurance by adding a 6k option to your car?
Thanks!
 

Daniel in SD

Well-Known Member
Jan 25, 2018
6,942
9,857
San Diego
That's a good question. Also, does your yearly VLF (vehicle license fee) increase when you purchase EAP later?
Seems like a loophole.
I've never had an insurance company ask about options on a car. I guess the major ones are encoded in the VIN?
 

MelaniainLA

Member
Dec 22, 2016
886
1,226
Los Angeles, CA
Change address in Tesla account to New Hampshire for a moment. Order the update tax free. Then switch back to CA.

Insurance only cares about non-manufacturer options. If you get totaled, they hardly pay anything for options to begin with!
 
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Tam

Well-Known Member
Nov 25, 2012
9,219
7,902
Visalia, CA
...Insurance only cares about non-manufacturer options. If you get totaled, they hardly pay anything for options to begin with!

When I signed up for my insurance, they base the premium on the total price before taxes and registration fees.

Let me understand:

Even though Insurance charges me a premium for $49,000 for a Model 3 but I can only file for coverage to a maximum of $35,000 because that's the base cost before adding on other options of $9,000 for Long Range Battery and mandatory $5,000 for Premium Upgrades?
 
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PoitNarf

My dog's breath smells like dog food
Jun 7, 2016
2,870
4,011
NJ
Change address in Tesla account to New Hampshire for a moment. Order the update tax free. Then switch back to CA.

I doubt this would work. The credit card charge would not go through because when making the charge the billing address will not match the address on file with your CC company. Of course if you actually have another home in a state with no sales tax you could probably change your billing address to there to make it work. If someone has actually gotten this to work and does not have a second home in NH for example then that’s quite the loophole.

Sales tax is one of the reasons I ordered EAP with the car. In NJ there is no sales tax on EVs so any options I add are considered part of the whole car and not taxed. If I had purchased EAP afterwards not only would it have cost $1000 more but I would also have to pay $397.50 in NJ sales tax.
 
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jgd108

Member
Jun 13, 2017
376
210
orange county
Change address in Tesla account to New Hampshire for a moment. Order the update tax free. Then switch back to CA.

Insurance only cares about non-manufacturer options. If you get totaled, they hardly pay anything for options to begin with!

You give the best ideas!! Might have to use a friend's credit card in Portland or something.. :p

Yes, you'll pay sales tax in CA.

Thanks for confirming.
 

MIT_S60

Active Member
Nov 23, 2016
1,052
895
Orange County, CA
When I signed up for my insurance, they base the premium on the total price before taxes and registration fees.

Let me understand:

Even though Insurance charges me a premium for $49,000 for a Model 3 but I can only file for coverage to a maximum of $35,000 because that's the base cost before adding on other options of $9,000 for Long Range Battery and mandatory $5,000 for Premium Upgrades?
If a car gets totaled, the insurance company bases the value of the car at the time of the accident, and traditionally options depreciate faster than the base price of the car. Just throwing numbers out there (they're definitely not meant to be taken as accurate), let's say the base price of the car depreciates by 30% over a year, the options might actually depreciate by 70% over that time. Thus percentage-wise a base model will depreciate slower than a fully optioned one.
 

Trips

"Boring bonehead questions are not cool. Next?"
Sep 22, 2015
1,223
1,407
Omaha, NE
I believe as of a couple weeks ago, the software would NOT let you update to the EAP after the purchase. I'm not sure if they have updated or if it can be done at the service center.

As for aftermarket options you just have to let your insurance know. Depending on your insurance this can be a pain but like with battery upgrades it can be done. A few years ago I totaled a three month old vehicle that I added an aftermarket alarm and TVs. After the cost for upgrades I walked away with $1,500 more then I had invested in it.
 

PoitNarf

My dog's breath smells like dog food
Jun 7, 2016
2,870
4,011
NJ
i was told there was no sales tax.
flat $6k out the door.
i guess not?

Depends on your state. For California you'll need to pay sales tax.

Edit: (or maybe not, see post below) I should probably only comment on NJ sales tax stuff :)
 
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Tam

Well-Known Member
Nov 25, 2012
9,219
7,902
Visalia, CA
i was told there was no sales tax.
flat $6k out the door.
i guess not?

According to the link:

Are Software and Digital Products taxable in California?

California downloaded software are not taxable

However, when I bought mine at the same time when the car was delivered, I guess they called it "Canned Software - Delivered on Tangible Media" because the software is housed in the car and that car is delivered with the software already activated inside, so it's taxable.

So for California, to skip paying sales tax, buy the download version after delivery.

However, while you do save on California sales tax, you pay directly to Tesla on post-delivery fee very heavily which is worse than paying sales tax to the government.

So, it's a matter of whether you want to pay less of a fee to the government or skip it and pay a much higher fee to Tesla itself.



B2B-software-exemptions.png
 
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