Is a cross country road trip to pick up a Tesla a good idea?

[andrewket]

All of the states have ways to handle this and avoid both double taxation or avoiding taxation. I would expect that if you picked up the car in California, TM would license it in Iowa. They would collect and pay to Iowa any tax due there. They would not collect any California tax since it is not being licensed in California.

By by the same token you cannot buy a car in Oregon with no sales tax and then license it in another state. As soon as you try to license it, you will pay a "use" tax which is the same as what the sales tax would have been. You can drive around with out of state plates but when you are stopped and asked to prove residency in Oregon, you will pay a hefty fine. This is way too big a tax issue for all of the states. The loopholes have been closed long ago.

California doesn't work like this. They collect in all cases. Only way to avoid it is to pick up in a different state. There are shipping companies that make a good business moving cars to Vegas for this reason.

 

[tga]

Actually, that's not how that works, pard. If you pick up in Fremont you're paying 9.5%. Go back and read the page you linked.

I know that. I never said otherwise. You completely missed the point of my post, and the FL program:

Motor Vehicles Sold in Florida to Residents of Another State
Section 212.08(10), Florida Statutes (F.S.), allows a partial exemption for a motor vehicle purchased by a resident of another state. The tax imposed is the amount of sales tax that would be imposed by the purchaser's home state if the vehicle were purchased in that state; however, the tax imposed must not exceed the Florida 6% tax rate. The tax collected is Florida tax and must be paid to the Florida Department of Revenue.

So if an Alabama resident goes across the state line and buys a car in FL, the sales tax collected by Florida is reduced to 2%. The buyer then gets a credit from Alabama for the prior tax paid, reducing the Alabama bill to $0. Without this provision, FL would charge their default rate of 6%, and the Alabama resident is screwed. FL dealers win out, since they can sell cars to non-residents without a disadvantage. Otherwise, FL dealers would lose the sale to an AL dealer, or have to further discount, and eat the 4%. Buyer wins (more dealerships on equal footing). FL dealers win (more potential customers). FL wins (less tax on a sale is better than no tax because the sale doesn't happen).

Addigs was proposing that CA waive sales tax on cars sold to nonresidents. I was simply pointing out that by following Florida's program instead, CA would be better off then under addigs' proposal. They'd get something more than 0%. I never claimed this was how it currently worked.

 

[brucet999]

I live in the EV desert of Iowa, and once the MX is finally out, don't really want to wait the extra month or more it will take to get my car shipped here, or to St. Louis or Minneapolis. My reservation # won't be until next year, but I have a question...

Is it a good idea to fly to the home office and accept delivery from the mother ship, then drive home?

Other possible benefits: could get a wrap/tinting done out there in the land of many cars, vs in Des Moines where the choices I'm seeing on the net are not many (like 1 car dealership for wraps, otherwise it's ad agencies)

Thanks in advance for your help!

:smile:

I live in CA and I wouldn't consider picking up at the factory because sales tax applied is highest in the state (due to county add-ons) at about 9.5%; vs 8% in Orange County and you pay the same $1200 destination charge (Model S rate; may be higher on X) no matter where in the US you take delivery.

In your case, factory pickup will cost you something like $3500 in excess sales tax, plus airfare.

 

[Merrill]

Keep in mind that there is a bill (AB945) that is going thru the legislature in California which if it passes starting in January 2016 that will reduce the sales tax on EV's to 3.06%.

 

[lucy]

Keep in mind that there is a bill (AB945) that is going thru the legislature in California which if it passes starting in January 2016 that will reduce the sales tax on EV's to 3.06%.

Woo! Thanks, Merrill, I'll keep an eye on that!
I had totally given up on this idea, but our car sales tax is 5%. will have to see if I would pay the difference, or still have to pay the whole 5%.
Hello, California bungalow tour and SuperCharger photo ops!

 

[brucet999]

Keep in mind that there is a bill (AB945) that is going thru the legislature in California which if it passes starting in January 2016 that will reduce the sales tax on EV's to 3.06%.

This from the legislature that is so anti business, anti Tesla that they have another bill in process to restrict their EV incentive to cars costing less than $40,000. I think it unlikely that they will lower sales tax for Teslas.

 

[lucy]

Thanks for the update Brucet999
Cali needs all the moolah it can get to fight fires, dig out from mud slides, etc...
Silly of me to think it would be that easy.

 

[brucet999]

Thanks for the update Brucet999
Cali needs all the moolah it can get to fight fires, dig out from mud slides, etc...

Mostly to pay for all the nonsense upon which we squander our resources. Despite half of Long Beach having come from Iowa, there's no Midwest (Illinois not included) common sense among our politicians.

 

[Merrill]

This from the legislature that is so anti business, anti Tesla that they have another bill in process to restrict their EV incentive to cars costing less than $40,000. I think it unlikely that they will lower sales tax for Teslas.

As far as I can see there is no cap on cost, and Brown wants this to promote the sales of EV's. It remains to be seen if it passes or if they change the language along the way.

 

[aesculus]

Not that it will help the OP much but here is the calculator the CA DMV uses to determine the new purchase fees (including sales and use tax). Note the tax is not where you pick it up but where the car resides (ie your home address).

Vehicle Registration Fee Calculator

 

[brucet999]

Not that it will help the OP much but here is the calculator the CA DMV uses to determine the new purchase fees (including sales and use tax). Note the tax is not where you pick it up but where the car resides (ie your home address).

Vehicle Registration Fee Calculator

Then, I was wrong in thinking I would pay Fremont 9.5% sales tax if I were to pick up at the factory but register it to my home address. Out of state buyers picking up at factory still get stuck with CA sales tax though, presumably at the Fremont rate?

 

[beths11]

A very reasonable opinion and way of doing things O-G. And also not the way California works. Unless you can take delivery and depart the state without taking advantage of any services of the state (charging station, restroom, ...) and prove it (very unlikely they will believe you aren't going to stop for dinner), they will be collecting California sales tax. Bums me out they do things that way - I'd love to take delivery in Fremont and drive home to Oregon, but alas.

I've even written to the Board that manages the Use Tax, and pointed out that they COULD be building up a new angle on the state tourism business. Think of how many US market owners would bring the family to California for the factory tour, pickup their car, and then drive it home; probably with a stop by Disneyland, Hollywood, drive up the coast, etc.. etc.. And think of how desirable Tesla owners are to have come do touristy things in your state.

Then Tesla would need to get to work, or outsource to a third party, the building of a package for overseas buyers. Come to California, pickup your new Tesla, drive it around for a month or 2 on your summer vacation; then drop it off on the East or West coast to be shipped back to your home and delivered to you there. BMW has that going, and I've read some awfully good stories from people who think that Germany is the only place to pickup a new one.

They could even avoid making major alterations to the state law - add in a 30 day registration that manufacturers of cars manufactured in California can issue as part of delivering a car (no dealers, only manufacturers), that can't be extended, and can only be issued to people that can in some way demonstrate that ultimate registration of the vehicle is somewhere other than California. Charge $100 for it - get some direct revenue for the state, get some more sales tax revenue from people vacationing at least partially in the state, and it'll all be revenue the state of California won't otherwise get. Sure seems like a good idea to me.


Any Use Tax Board folks reading this, feel free to claim the ideas in this post as your own, and just do it! Preferably in the next month or two so I can drive my Model X back from Fremont!

I think Volvo used to do this when they were made in Sweden. You fly to the factory in Sweden, pick up your car, tour the country. When you are ready to go home, Volvo would ship it to the US for you.

 

[MorrisonHiker]

I think Volvo used to do this when they were made in Sweden. You fly to the factory in Sweden, pick up your car, tour the country. When you are ready to go home, Volvo would ship it to the US for you.

They still do this and most are still made in Sweden. In addition to a no-haggle discounted price, they even pay airfare for two roundtrip to Sweden, hotel and a meal or two. I was considering the Overseas Delivery option of the new XC90 T8 until I found out the electric range was so short. I decided to just wait and get an X (or S) instead.

 

[brucet999]

I think Volvo used to do this when they were made in Sweden. You fly to the factory in Sweden, pick up your car, tour the country. When you are ready to go home, Volvo would ship it to the US for you.

Not only in Sweden. We bought our Volvo 850 from a local SoCal dealer for European delivery…in Frankfurt, Germany, lived a year in Germany and shipped the car home when we came back.

California DMV, characteristically refused at first to believe that a year-old car imported with 26,000 miles on it was actually used and demanded to collect sales tax unless I could provide gasoline receipts to prove that I had in fact driven it in Europe.