I live in CA but may be moving next spring to CO and I am wondering how to work through the purchase of my M3. I don't want to lose my spot in line so I can take advantage of the 7500 fed credit so I would need to take delivery as a California resident but if the timing lines up correctly, I may not register the vehicle in CA because I would be paying registration twice. Colorado requires registration within 60 days of purchase vs CA requires 10 I think so I could register it in CO but not sure if that impacts delivery from Tesla. The sales tax paid would also be an issue. The other question in all of this is the tax credit because CO provides $5,000 vs $2,500 in CA. Any input would be appreciated.
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Zaphod
Galaxy President (former)
What are you planning on ordering and what is it telling you for estimate now? Colorado isn't the much farther east than California so even worst case I can't imagine it making that much difference. And since CO has higher credit and most likely lower sales tax, I think that scenario seems more beneficial.
AlanSqB
Dog Chauffeur
I’m no expert, but I think you may be creating a sales tax headache for yourself doing it this way.
Just defer until you move. Elon says you won’t lose your spot. Just be ready for our rediculous tag fees here in CO. They will eat up a good fraction of that $5k
Just defer until you move. Elon says you won’t lose your spot. Just be ready for our rediculous tag fees here in CO. They will eat up a good fraction of that $5k
Wouldn't this be the same as anyone else taking delivery at the factory and then driving it home? You should get a temporary tag to put on the car that is good for a period of time. You drive it home and then register it. The only problem you'll run into is you'll need to pay the taxes for wherever you take delivery.
AlanSqB
Dog Chauffeur
Did the thing where you had to pay CA sales tax for getting CA delivery even if you don’t live there get sorted? That’s the tax headache I was referring to.
Zaphod
Galaxy President (former)
No, it wouldn't be the same. Their main point and belief is that if they moved out of CA, they would then move further back in the queue and possibly no longer get full federal tax credit. The state registration and tax concerns are just additional items that depend on the prior point.
Issue (1) is delivery timing to take advantage of the full federal credit. Issue (2) is registration concern because if I register it in CA and then move, I pay registration twice. Issue (3) is sales tax and state credit to offset the sales tax. Sales tax is cheaper in CO (barely) and registration is cheaper in CA by about 500 dollars but its more about the credit and not paying registration twice.
Thank you to everyone for the input. My anticipated delivery window is Feb-June depending upon the battery size.
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ummgood
Member
Another possible issue is you might pay double tax.
For example when I moved to Texas from California I paid sales tax on a 2003 Honda CRV in California. Texas then charged me tax again when I registered it in Texas. I believe it was almost $2k to register it in 2005. So not only might you pay the higher CA sales tax but they might get you with more tax when you move to CO.
For this reason I told my parents (they are moving here in 2 months) not to buy a car until they get here. My dad wanted to buy in CA because he works for a dealership and gets good prices but it wouldn't make up for the double tax.
For example when I moved to Texas from California I paid sales tax on a 2003 Honda CRV in California. Texas then charged me tax again when I registered it in Texas. I believe it was almost $2k to register it in 2005. So not only might you pay the higher CA sales tax but they might get you with more tax when you move to CO.
For this reason I told my parents (they are moving here in 2 months) not to buy a car until they get here. My dad wanted to buy in CA because he works for a dealership and gets good prices but it wouldn't make up for the double tax.
I agree. This is one of those questions where we don't have much information now, but by the time you actually have to make a decision things will be much clearer. My guess is that it won't make any difference to just get it delivered in CO.
Taxes in California are probably more than what you'd pay in Colorado (depends on where you are moving to) but registration will probably be more expensive in Colorado than California. I would do a spreadsheet and calculate if there's that much difference between the two options. I know just within Colorado taxes can vary greatly from one street (unincorporated) to the next (incorporated) and could easily add $5000 to the sales taxes due.
If you register it in California and then move to Colorado, it would be considered a used vehicle and you'd no longer be eligible for the $5000 Colorado tax credit, so you'd want to be sure to only register it once. I think you'd have to buy it in Colorado to claim the state tax credit. I've seen others post about trying to claim the credit without even living or paying taxes in Colorado. It doesn't work that way.
If you register it in California and then move to Colorado, it would be considered a used vehicle and you'd no longer be eligible for the $5000 Colorado tax credit, so you'd want to be sure to only register it once. I think you'd have to buy it in Colorado to claim the state tax credit. I've seen others post about trying to claim the credit without even living or paying taxes in Colorado. It doesn't work that way.
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I believe that if the taxes are more in California, then he wouldn't have to pay again in Colorado but he wouldn't get a refund for the difference. He also probably wouldn't be able to claim the state tax credit.
Regarding issue #1, you will be fine; as was explained in a different thread the federal tax credit is a phase out credit, not a hard cut, and the phase out rules are pretty generous. The first phase is that the full credit will be available for the entire quarter that Tesla ships the 200,000th car. The second phase is that it will still be a 100% ($7,500) credit for the next quarter, then after that it drops off slowly, (but I can't remember the exact percentages). We're talking about the $7,500 credit being available for 4-6 months *AFTER* they ship their 200,00th car. So, bottom line, take delivery in CO and you'll be good.
Or he could drive around with California plates for a year. I drove for almost 17 years with plates that were not registered in my town.
The only downside is that California plates will get you pulled over along I-80 eastbound. It might be different in Colorado but in Nebraska it is very profitable for the State Patrol.
The only downside is that California plates will get you pulled over along I-80 eastbound. It might be different in Colorado but in Nebraska it is very profitable for the State Patrol.
He could but that would be a $1000 fine in Colorado if he gets caught. You have 90 days to register once moving to Colorado.
T34ME
Active Member
If you take delivery in California, you will pay California sales tax whether you live in California or Colorado. Your best bet is to take delivery in Colorado and register it there.
fluxemag
Member
Sales tax is almost 5% less in CO than CA, so that could be $1500-2000 savings there, plus the additional $2500 state tax credit, and even if you don't get the full federal tax credit, you would still get partial. Plus you will save registration hassles and putting a bunch of miles on the car. Tesla taxes you based on the delivery location.
With my Model S I paid 9.8% sales tax in AZ, then moved to OR 6 months later which has no sales tax. I spent plenty of time researching how to avoid that tax bill only to determine that anything I did wouldn't be worth the risk (including Montana LLC). In my case, if I had deferred delivery, the price would have been $10k higher for the car because they discontinued the "40kWh" car.
With my Model S I paid 9.8% sales tax in AZ, then moved to OR 6 months later which has no sales tax. I spent plenty of time researching how to avoid that tax bill only to determine that anything I did wouldn't be worth the risk (including Montana LLC). In my case, if I had deferred delivery, the price would have been $10k higher for the car because they discontinued the "40kWh" car.
What tax rate are you looking at for Colorado? As I mentioned earlier, the sales tax can vary greatly, ranging from 4% to nearly 9% depending on where you live in Colorado. Registration is also much higher in Colorado and stays high for years.
There's no money for a CA tax credit, and I'm not hopeful for one in the near future either. Not by the time OP is getting the car. I'd say you can clearly count the CO tax credit on one side of the ledger with no offsetting CA credit when doing your calculation.
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