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Factory Delivery / CA State sales tax

Discussion in 'Model S' started by Lloyd, Mar 27, 2012.

  1. Lloyd

    Lloyd Active Member

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    Shipping the item car or otherwise by common carrier also exempts the state sales tax for shipments out of that state. California is also trying to collect tax on items shipped from other states to California. Amazon.com recently accepted a settlement to collect tax from other states for items shipped to California. You can order things from Amazon tax free for the remainder of this year then tax starts. California sends out a form every year where you are supposed to claim all the items you bought in this manner and pay the tax on them. Is this a violation of the Interstate Commerce clause?? Not sure....
     
  2. Blurry_Eyed

    Blurry_Eyed MS Sig #267, MX Sig # 761

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    I emailed my Tesla Customer Advocate and received the following response about the sales tax issue in regards to Factory Delivery and California sales tax (BTW my advocate has been stellar in his responsiveness and getting answers to my questions - Top notch customer service from Tesla in my book!):

    'Since your vehicle will be registered in Washington, regardless if opt for the Factory Experience and take delivery in California, you will NOT pay California taxes. All customers will be responsible for paying taxes on where their vehicles will be registered. We will provide temporary California registration which is valid for 90 days anywhere in the US, and we will also register your vehicle with your state.'

    So based on this response I won't have to pay California Sales tax if I opt in for the Factory Experience. Washington state has nice sale tax exemption for electric vehicles which amounts to a lot. Our sales tax is pushing close to 10% (We don't have a state income tax, so they get us on sales tax). The exemption is scheduled to run through July 1, 2015 so hopefully the Model X will deliver to us before then as well!

    I guess we will actually find out officially once we get to a point of delivery and know all the details on the Factory Experience.
     
  3. markb1

    markb1 Active Member

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    Here's the California DMV calculator that will tell you the sales tax and fees. For San Diego County, sales tax is 7.75%, though a few cities in the county tack on additional tax. (The city of San Diego does not.)

    Vehicle Registration Fee Calculator
     
  4. Blurry_Eyed

    Blurry_Eyed MS Sig #267, MX Sig # 761

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    Just received this additional info from my Customer Advocate regarding sales tax and Factory Delivery:

    'One caveat to keep in mind about customers driving with their California 90 day temporary registration tag is that California requires customers to travel directly back to their permanent state of registration. I'm seeing if I can get the specifics on the 90 day tag. It is good to keep in mind if you were thinking about taking a detour after picking up the vehicle.'

    So my reading of this is that you can get your car, but you should not just hang out in the bay area after getting it. You should start making your way back to your home state after delivery. I don't see how California would necessarily be able to enforce it if you were to say drive into San Fran, spend the night and then start your road trip at a leisurely pace back to your home state via a nice scenic route with stops along the way...
     
  5. bonnie

    bonnie Oil is for sissies.

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    Good information, thanks.
     
  6. Mycroft

    Mycroft Life happens

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    Great news Blurry!!! If this works out, my wife and I will DEFINITELY be picking up the car at the factory and driving a nice scenic route back to WA.

    AWESOME!!!!
     
  7. NigelM

    NigelM Recovering Member

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    Freemont to Florida via the Pacific Coast Highway....:wink:
     
  8. Blurry_Eyed

    Blurry_Eyed MS Sig #267, MX Sig # 761

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    One more addition I just received:

    'I wanted to include one caveat about picking the vehicle up in California if you are registering the car in another state. In order to avoid your paying sales tax in California, we will provide what's know as a 'One Trip Permit'. This requires that you leave the state by the 'shortest practical route'. Failure to do so could result in CA sales tax becoming due.'

    I get the impression the above language was what Tesla received from the State authorities. So it sounds like I would basically pick up the car and then start my trek back to Washington. The shortest practical route is definitely vague enough where I could take a trip up the coast highway or I-5. It doesn't seem to indicate any kind of time constraint. Also the policing and enforcement of this definition would be problematic at best for the authorities. I think the intent is that you really are just picking up the car and driving it back home and not staying in the state for an extended period of time.
     
  9. Trnsl8r

    Trnsl8r Blue 85kwh since 12/8/12

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    Am I the only getting into a persistent error with this?

    No, I'm not putting dollar signs or commas in the price, just plain numbers. Frustrating...
     
  10. markb1

    markb1 Active Member

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    I'd bet the only way you could get caught is if you were pulled over on the opposite side of the pickup location from where you are registering the car. For example, you're registering the car in Oregon but you get pulled over for speeding in Monterey.

    Even if you drive it back to Oregon and register it there, you're still allowed to drive it back to California for vacation. You're just supposed to use it primarily outside of California to avoid the use tax.
     
  11. Robert.Boston

    Robert.Boston Model S VIN P01536

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    My fantasy route heads out past Lake Tahoe, so this could work... (RV campgrounds FTW).
     
  12. NigelM

    NigelM Recovering Member

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    Coincidence that each time a question/statement was raised here, you got another additional caveat from Tesla...they wouldn't be reading this now would they? :wink: (waves)

    Haha...What are they gonna do? Follow me? If people pick-up their cars in Freemont would this clause mean that we'd all have to head directly for Reno to get out of the State? :rolleyes:

    "Oops, sorry Officer I had the map upside down.....:redface:" Would the average CHiP have any idea about the details of these particluar laws?
     
  13. Mycroft

    Mycroft Life happens

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    California's insane taxation policies could probably fill entire economics courses. Another example is my retired pay. As a Navy member, if I had retired while stationed anywhere in CA, my retired pay would have been taxed by CA for the rest of my life, regardless of where I lived. You can believe, I was nowhere near the place when I hit my 20.
     
  14. ckessel

    ckessel Active Member

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    #14 ckessel, Mar 27, 2012
    Last edited: Mar 27, 2012
    Much as I would love to believe this, I'll believe it when it actually happens.

    Here is another quote directly out of the CA pub34 document related to the entity (Tesla) selling the car:
    Again, I really want to believe, I do, I want to pick up at the factory. My point here isn't to be a naysayer, but just to say be double plus extra super sure it's actually going to work the way we all want. I'm guessing it'd be really unpleasant to have the CA BOE after you.

    To make thing seven more complicated, there's "use tax" and "sales tax". Taking the car out of state avoids the use tax, but not the sales tax. The sales tax is waived or avoided or some such if you keep it in state because you then pay the use tax. The amounts paid are equivalent, but they have different legal reasons for existing, I think precisely to avoid out of state people avoiding paying sales tax.

    It's probably worth reading: http://www.boe.ca.gov/pdf/pub34.pdf
     
  15. onlinespending

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    Or similarly, you could fly to Las Vegas. And have it delivered to one of the hotel casinos you're staying at. Imagine the scene you'd make :) Then drive to Los Angeles, which is a 266 mile drive, and proceed your way up Highway 1 as I know many of you wanted to do. You could eventually go up to Fremont to get that factory tour to complete the trip. This way you can have your CA vacation, visit the factory, but avoid the CA taxes by taking delivery in NV.
     
  16. Robert.Boston

    Robert.Boston Model S VIN P01536

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    I think we've established now that Tesla has found a work-around to the CA tax issue for people who will register their cars out of state.
     
  17. ckessel

    ckessel Active Member

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    We have? What was it, I missed it.
     
  18. bonnie

    bonnie Oil is for sissies.

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    Post 130 in this thread: Here.

     
  19. ckessel

    ckessel Active Member

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    Right, but I followed that up basically saying I'm not sure that's correct along with quotes and links to the BOE's laws. I haven't seen any pointers yet to something to contradict that. I'm glad the Customer Advocate answered, but to be honest I doubt the correctness of the response. It also directly contradicts the email I got from a BOE representative on the question.

    In a nutshell, Tesla is going to need to quote something from a BOE publication. If it were that easy to skirt the law, it would have been easy to find examples before now.

    From my reading of the BOE regulations though, Tesla is actually the one responsible for collecting the sales tax, so if they're willing to eat that cost then that's different. I'd doubt they're going to eat the cost though, it'd be huge.

    Edit: By the way, that 90 day tag the customer advocate mentioned is so you don't have to register in CA. It's not related to the requirement to pay sales tax.
     
  20. onlinespending

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    Yeah, I was unaware we had. In my cursory search for temporary nonresident registration, it seems to be more for people with a car already registered out-of-state that wish to operate it in CA for an extended period (up to 90 days). I have yet to find anything that would exempt CA sales tax if you purchased it in CA.
     

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