Tax consequences of California delivery

[John R Olson]

I’m from Minnesota. What are the state tax consequences if taking delivery at a California delivery center? Full CA sales tax? We have a permanent (decades) MN address and will be driving it home.
I ask mostly because MN state tax is lower than CA by 3 or 4%.

 

[mongo]

I’m from Minnesota. What are the state tax consequences if taking delivery at a California delivery center? Full CA sales tax? We have a permanent (decades) MN address and will be driving it home.
I ask mostly because MN state tax is lower than CA by 3 or 4%.

You will pay full CA sales tax. Not sure if MN allows that to count toward what you would owe there or will charge you also..

 

[cpa]

Yes,

You will pay the California state-wide rate if you pick up at the factory. (You should not be assessed the local rate for Alameda County/City of Fremont.)

When you register your vehicle in Minnesota, the state should give you credit for "sales tax paid to another state." Since the Minnesota rate is lower than California, you will not owe anything additional to Minnesota, but you will not receive a refund, either.

I know it sucks. But California is not the only state to cast such a wide net.

I think one must look at this from the State's point of view. You could have all sorts of proof of Minnesota residency, yet you just completed a move to California or recently became domiciled in California (there is a difference.) Or, you could be one of those larcenous types who tries to game the tax system. (No accusation, just trying to view things from the other perspective.)

 

[Gen3]

Yes,

You will pay the California state-wide rate if you pick up at the factory. (You should not be assessed the local rate for Alameda County/City of Fremont.)

When you register your vehicle in Minnesota, the state should give you credit for "sales tax paid to another state." Since the Minnesota rate is lower than California, you will not owe anything additional to Minnesota, but you will not receive a refund, either.

I know it sucks. But California is not the only state to cast such a wide net.

I think one must look at this from the State's point of view. You could have all sorts of proof of Minnesota residency, yet you just completed a move to California or recently became domiciled in California (there is a difference.) Or, you could be one of those larcenous types who tries to game the tax system. (No accusation, just trying to view things from the other perspective.)

The state also loses out on a lot of revenue people would pay to come out.
I’m not sure how temporary registration works there, but they could enable it if they wanted to.

 

[T34ME]

The state also loses out on a lot of revenue people would pay to come out.
I’m not sure how temporary registration works there, but they could enable it if they wanted to.

Majority California residents don't want them to enable it.

 

[cpa]

I should point out that we only see the sales tax law as it applies to our own tiny personal situation in buying a new car from Tesla and wanting to pick the car up at the factory.

The truth of the situation in California and many other states is that sales tax is collected at the point of sale. The point of sale is not an easily understood concept. Generally, the point of sale is where title changes hands. Where does title change hands on a piece of equipment that is manufactured in California and delivered to the customer in Illinois? Does it make a difference if (a) the customer picks it up in the customer's truck? (b) The manufacturer delivers the equipment in the manufacturer's truck? (c) The equipment is shipped via UPS or the postal service? (d) The equipment is shipped via common carrier? These are not identical situations.

Who bears the risk of loss if the equipment is damaged in transit? This is likely the most common deciding factor in determining the point of sale and therefore the assessment of sales tax.

Oh, and by the way, the Supremes just decided Wayfair v. South Dakota. Your internet purchases from out-of-state vendors will now have to start assessing your state's sales tax in most situations. The concept of nexus that was the linchpin of Quill v. North Dakota (1992), is no longer relevant case law. But the several states likely will take a couple of years to get the legislation up and running.