Sales Taxes - pay in two states!!

[saladman]

I might be mistaken, but wasn’t there a ‘loophole’ in CA tax law that allows for you to drive out of the state within a certain number of days of purchase (2 days or something) and legally avoid CA taxes? (you would of course, still be on the hook for your state’s taxes if any).

I tried for the one day permit to get the LEAF out. Since it was new, if its tires ever touched the pavement I was on the hook for California fees.

 

[yobigd20]

i'm worried about paying sales taxes when I move to NY from NJ. I didn't pay sales tax on the MS in NJ (no sales tax for EV's), but as far as I understand when you move into NY you have to pay sales tax AGAIN for vehicles even if you've paid them in other states. aka there is no reciprocity. and even if there was, theres no credit applied anyway because I paid $0 for sales tax in NJ.

 

[Gizmotoy]

As many have mentioned, this is a complex issue. It not only depends on the state where the car resides, but sometimes also the state where the car will be going. Often states have reciprocity agreements between nearby states to collect taxes directly, or to create special tax conditions between them. It's kind of a mess.

 

[JohnQ]

i'm worried about paying sales taxes when I move to NY from NJ. I didn't pay sales tax on the MS in NJ (no sales tax for EV's), but as far as I understand when you move into NY you have to pay sales tax AGAIN for vehicles even if you've paid them in other states. aka there is no reciprocity. and even if there was, theres no credit applied anyway because I paid $0 for sales tax in NJ.

There's a non-resident purchase exemption, take a look at the DMV site:

"If you were not a resident of New York when the vehicle was purchased, use form Sales Tax Exemption (DTF-803) to receive a non-resident exemption from NYS sales tax. Form DTF-803 defines the terms "non-resident" and "resident"."

 

[bonnie]

Okay.
Did the blueberries arrive yet?

No?

Yes!! Wow, thank you!! (just made fresh goat cheese - spectacular together!)

You & your wife ... the best.

 

[Cyclone]

Omg my other half can't see this thread. Blueberries are a crazy in this household that has started to afflict me after going blueberry picking last year and tasting farm fresh blueberries!

 

[Electricfan]

http://comptroller.texas.gov/taxinfo/taxpubs/tx96_254.pdf

This is the Texas Motor Vehicle Tax Guidebook, put out by the state Comptroller. Scroll down to page 17 to view Form 130-U. Let's look at Section 21, Sales Tax Computation.

(a) Sale Price
(b) less Trade In
(c) n/a
(d) taxable amount (add A + B)
(e) 6.25% Tax on Taxable Amount
(f) late tax penalty (n/a)
(g) Tax Paid to ________ (state)
(h) Amount of Tax and Penalty Due (E + F - G)

The Fremont rate is 9.50%. The Texas Sales Tax rate is 6.25%.

No sales tax due.

This seems to make sense. I can't imagine I would be required to pay 9 something % in CA and another 6.25% in TX. Well, check that I can too imagine it, but it just seemed wrong. I'm out of town working right now but when I get back I'll verify - call the Tax man in Houston. But I don't guess I will go to CA anyway as my tax bill would increase about $1000 (assuming no TX taxes). Darnit.

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Essentially in California the sales tax is collected at the point of sale, regardless of the destination of the item.

So, are you saying I will have to pay CA sales tax, regardless of what I pay in TX? All I can say is, that didn't happen in 2013, and neither Tesla nor the bank has said it will happen this time. I'm actually hoping to pay much less sales tax this time because I get to deduct my trade-in.

 

[Cyclone]

So, are you saying I will have to pay CA sales tax, regardless of what I pay in TX? All I can say is, that didn't happen in 2013, and neither Tesla nor the bank has said it will happen this time. I'm actually hoping to pay much less sales tax this time because I get to deduct my trade-in.

If the tires of the car hit any public road in CA, then yes, you will pay CA sales tax if buying from a "dealer". Buy from an individual or don't drive the car until across the state line (i.e., have it trucked out of CA and then drive it). The previous car you bought I thought you said was delivered to TX, so it would not have been charged tax in CA.

 

[Electricfan]

The previous car you bought I thought you said was delivered to TX, so it would not have been charged tax in CA.

Yes that's correct. This one will be as well. So, good! No CA taxes - yeah!!

Although, I agree with someone above who wrote CA could do itself a favor if it wrote some code to exempt Tesla purchases. I think probably thousands of people a year would come to Fremont, do the tour and drive home. I would love to. I've never toured SF or anyplace really - I'd love to see some of CA. Went to a football game at Berkeley once, that's all.

Thinking positively, in ten years it could be tens of thousands coming to Fremont...

 

[cpa]

This seems to make sense. I can't imagine I would be required to pay 9 something % in CA and another 6.25% in TX. Well, check that I can too imagine it, but it just seemed wrong. I'm out of town working right now but when I get back I'll verify - call the Tax man in Houston. But I don't guess I will go to CA anyway as my tax bill would increase about $1000 (assuming no TX taxes). Darnit.

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So, are you saying I will have to pay CA sales tax, regardless of what I pay in TX? All I can say is, that didn't happen in 2013, and neither Tesla nor the bank has said it will happen this time. I'm actually hoping to pay much less sales tax this time because I get to deduct my trade-in.

What I was trying to say is the collection of sales tax is determined by the "point of sale." If you pick up the car at Fremont, the point of sale is in California, since title transfers and ownership commences. If you have the car delivered via common carrier to Texas, then the point of sale is in Texas, and California will not collect any sales tax, as title will not transfer until delivered. Tesla and the carrier assume all liability for damage to your car in transit in this scenario. I am not a lawyer, but if you arrange to have the car towed on a flatbed owned by your brother-in-law from the factory to your home in Texas, you would still be on the hook for California sales tax as your brother-in-law's flatbed is not a "common carrier."

If you think about it for a second and play devil's advocate, a buyer could use an out-of-state address to make their purchases (like people who live near Oregon) and avoid California sales taxes even though they are bona fide residents.

 

[yobigd20]

There's a non-resident purchase exemption, take a look at the DMV site:

"If you were not a resident of New York when the vehicle was purchased, use form Sales Tax Exemption (DTF-803) to receive a non-resident exemption from NYS sales tax. Form DTF-803 defines the terms "non-resident" and "resident"."

Yeah but under the non resident exemption:
"— At the time of purchase the purchaser was not a resident of NYS, did not have a place of abode in NYS, and was not engaged in any trade business, employment, or profession in NYS. "

As I work in NYC doesn't that mean I can't claim it?

 

[JohnQ]

Yeah but under the non resident exemption:
"— At the time of purchase the purchaser was not a resident of NYS, did not have a place of abode in NYS, and was not engaged in any trade business, employment, or profession in NYS. "

As I work in NYC doesn't that mean I can't claim it?

I see what you're referencing but I don't know the answer to the question. As a resident of CT I know how aggressive NYC is about collecting income taxes if you work any portion of your time in NYC; I don't know what the ground rules are about sales/use tax. Time to consult a tax guy ... good luck!

 

[Rusty1]

I purchased my MS in CA from a used car dealer but took delivery in TN and only paid TN sales tax.