NJ doesn't charge sales tax on new EVs

[Drew-MS]

Well, exactly. Buying and registering a car in NJ, when it’s going to spend all its time in CA (as the OP’s location shows) is a real stretch. It might work, but if your insurance company can show it’s never been garaged in NJ, you could be in for a world of hurt.

Good point and with the insane technology in Tesla cars, it’s not hard for insurance companies to find out where the car has been.
since MK677 has a valid NJ residence, I would do the same. Since I don’t have a NJ residence, I’ll just pay the NY tax with a smile

 

[mk677]

Good point and with the insane technology in Tesla cars, it’s not hard for insurance companies to find out where the car has been.
since MK677 has a valid NJ residence, I would do the same. Since I don’t have a NJ residence, I’ll just pay the NY tax with a smile

If you don't live or own property in NJ registering the car in NJ could constitute insurance fraud, ignoring the tax implications.

 

[Drew-MS]

what constitutes being garaged in NJ, 1 night? 10 nights? 30 nights? most nights? every night?

Probably more than 50% of the time. Regardless, I’d do the same as you if I could.

 

[mk677]

Probably more than 50% of the time. Regardless, I’d do the same as you if I could.

probably? sorry probably isn't a recognized legal term. my point is if the car is properly registered then there is no fraud involved. of course you would if you could, 7% of 100k buys a lot of electrons

 

[Drew-MS]

probably? sorry probably isn't a recognized legal term. my point is if the car is properly registered then there is no fraud involved.

 

[Drew-MS]

probably? sorry probably isn't a recognized legal term. my point is if the car is properly registered then there is no fraud involved. of course you would if you could, 7% of 100k buys a lot of electrons

I'm actually paying almost 9%. The price of my plaid is $122,290, but with tax included - $132,850.. So I definitely understand the advantages to register in NJ; of course, for those that legally can do it.

 

[HankLloydRight]

I should be able to pick it up in Fremont CA for a drive-away w/o paying CA tax to NJ if I so choose

I think people also overlooked this little nugget. If you pick up the car in CA, you're paying CA sales tax regardless of where you plan to register the car.

 

[dmurphy]

I think people also overlooked this little nugget. If you pick up the car in CA, you're paying CA sales tax regardless of where you plan to register the car.

Is that a CA thing? I just - for example - bought a travel trailer in PA, but live in NJ. The PA dealer doesn’t collect NJ sales tax, so all they do is get a transit tag from PA for me - good for 30 days - and hand me the Manufacturer’s Certificate of Origin. I take THAT to the NJ MVC along with the sales order, and NJ issues the title, after collecting my NJ sales tax on the spot.

 

[HankLloydRight]

Yes, it's a CA only thing, as they don't have a reciprocal sales tax agreement with most other states. Just as if you walked into a BestBuy in L.A. and bought a $2000 big screen TV, you're paying CA sales tax regardless of your state of residence or where you're talking the TV.

They've tried several times to change this just for out-of-staters taking delivery at Fremont, but it always fails to pass.

edit: Some states might allow you to take a credit against the tax paid to CA (I think FL does this), but CA still gets their cut. If the OP actually lives in CA, I don't see how he'd avoid the sales tax just because the car is being (fraudulently) registered in NJ.

 

[Stirthepot]

what constitutes being garaged in NJ, 1 night? 10 nights? 30 nights? most nights? every night?

the car being in the state for the majority of the time counts as garaged, trips are fine, even an extended trip - if you could prove it, but if you register a car in a state and insure it there, and then have it in another state for primary use you are committing fraud and you will have a problem when the insurance company see that.

 

[dmurphy]

Yes, it's a CA only thing, as they don't have a reciprocal sales tax agreement with most other states. Just as if you walked into a BestBuy in L.A. and bought a $2000 big screen TV, you're paying CA sales tax regardless of your state of residence or where you're talking the TV.

They've tried several times to change this just for out-of-staters taking delivery at Fremont, but it always fails to pass.

edit: Some states might allow you to take a credit against the tax paid to CA (I think FL does this), but CA still gets their cut. If the OP actually lives in CA, I don't see how he'd avoid the sales tax just because the car is being (fraudulently) registered in NJ.

Interesting, since here we treat sales tax on goods the same way (collected at point of purchase) but not automobiles. For those, it’s based on where the titling happens. In my case — the PA dealer isn’t authorized to collect NJ sales tax, so they don’t. But because title to the vehicle doesn’t pass in PA, they don’t collect sales tax on it either. Interesting that CA does on an untitled vehicle.

 

[mk677]

Is that a CA thing? I just - for example - bought a travel trailer in PA, but live in NJ. The PA dealer doesn’t collect NJ sales tax, so all they do is get a transit tag from PA for me - good for 30 days - and hand me the Manufacturer’s Certificate of Origin. I take THAT to the NJ MVC along with the sales order, and NJ issues the title, after collecting my NJ sales tax on the spot.

I suspect that many dealers in eastern PA can register the car in NJ for you upon purchase

 

[dmurphy]

I suspect that many dealers in eastern PA can register the car in NJ for you upon purchase

Only if they’ve chosen to file with NJ MVC and acquire an NJ dealers’ license. Then they can transact business with NJ MVC and collect sales tax on NJ’s behalf. I doubt any dealer in CA would do such a thing, nor would the NJ MVC entertain it without a *ton* of questioning.

 

[BrianBigNFun]

I suspect that many dealers in eastern PA can register the car in NJ for you upon purchase

Being a car salesman a while back I can confirm this.

hypothetical
You live in NJ, buy an EV and then move to another state 2 weeks later
They’re not going to come after you. Having a residence in NJ is the key

 

[dmurphy]

Being a car salesman a while back I can confirm this.

hypothetical
You live in NJ, buy an EV and then move to another state 2 weeks later
They’re not going to come after you. Having a residence in NJ is the key

The OPs hypothesis was to buy the car in CA and use his family’s residence in NJ to register, title & insure the vehicle. That could be very problematic, especially the “insure” part. One wayward idiot rear ends your car and the insurance company starts asking lots of uncomfortable questions ... and then their attorney does.

 

[BrianBigNFun]

The OPs hypothesis was to buy the car in CA and use his family’s residence in NJ to register, title & insure the vehicle. That could be very problematic, especially the “insure” part. One wayward idiot rear ends your car and the insurance company starts asking lots of uncomfortable questions ... and then their attorney does.

Hence why I said residence
Using family’s address would indeed be fraud and ill advised

 

[Merle]

Got off the phone from my insurer (Ameriprise via Costco) and there is no fraud or wrong-doing with insuring a vehicle in another State.

You just have a new policy written up for that State, NJ, in order to register the vehicle there.

Lake Tahoe spans two States, California (where Tesla is located and taxes are high) and Nevada (where there is 0% income tax and fees lower). So not all people who reside at "Tahoe" live in CA. We make conscious economic decisions which allow us to pay cash for our vehicles, a Tesla (or two) included, so there are no financing shenanigans either.

For a new Model S (2021) I compared two rates

Nevada ($290) : A standard $1000 deductible comprehensive policy w/o rental for 6 months (garage is $4 more) if you drive 30-35K miles a year (+$20 if you are above that 12.5K typical person).
New Jersey ($940) : Covering the medical treatment of passengers (guess it's a NJ thing) and the above w/o garage. Don't cover passengers medical (up to $250K) then you save $17 in 6 months.

It's a standard Ameriprise / Costco policy ($250K or something) which is the minimums for those who have a multi-million dollar umbrella policy, so it's not the bare minimum, but something like $250K Bodily ($500K each accident), $100K property, $250/$500 for the uninsured motorist and $1000 deductible cost.

I related to both agents (one for my existing policy, and the new NJ policy) what I planned on doing:

* Buying the vehicle
* Picking up in CA and going to grab luggage from NV
* Road trip across the US (CA ... FL and then up north to NJ)
* Staying / traveling for a while
* Then back home

Nevada does not require registration until the vehicle has been in the State for at least 30 days anyhow. All policies written allow you to travel and be covered. For this specific use case, it looks like we'd just have to have the insurance policy written up for NJ so I could register the vehicle ... in NJ.

The "pick up and drive off" usually is covered by the 3-day transit permit to get your vehicle out of State.

To emphasize : this is a tax AVOIDANCE plan, and not a tax EVASION scheme.

 

[HankLloydRight]

If you take delivery in CA, you’re still going to pay CA sales tax. So good luck with your tax fraud plan.

 

[mk677]

* Picking up in CA and going to grab luggage from NV
* Road trip across the US (CA ... FL and then up north to NJ)
* Staying / traveling for a while
* Then back home

Nevada does not require registration until the vehicle has been in the State for at least 30 days anyhow. All policies written allow you to travel and be covered. For this specific use case, it looks like we'd just have to have the insurance policy written up for NJ so I could register the vehicle ... in NJ.


To emphasize : this is a tax AVOIDANCE plan, and not a tax EVASION scheme.

are you aware that CA will collect the sales taxes on the sale of the car upon delivery regardless of where it is ultimately registered?

 

[HankLloydRight]

* Road trip across the US (CA ... FL and then up north to NJ)

What plates are you going to have on the car during this road trip?

You do realize that you'll need to apply for registration at a physical NJ DMV location before you get NJ plates.

I still think you're going to need a NJ licence to register the car there.

Finally, why don't you call up NV and ask them if denying the state the sales tax is only "tax avoidance" since you don't actually reside in NJ. You can convince yourself of that, but any way you cut it, it's still tax fraud since you are lying about your NJ residence.