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Tax on FSD after Delivery?

whttiger25

Member
Jun 25, 2016
580
775
Oakland, CA
Hello,

My understanding of California law is that an OTA software update, where nothing physical changes hands, cannot be taxed. I'm looking at the $7000 upgrade on an existing inventory order, and wondering if I should wait till after delivery to buy it? I can't get straight answers from anyone at Tesla. I talked to one person who said it is always taxed. However, when I went through the steps of upgrading my 2017 100D (I didn't hit the final purchase button as I didn't intend to actually upgrade it) I saw no mention of tax there. But since I didn't purchase it I can't say for sure. My delivery date is June 28 so i'll have time to get it before the $1000 price increase on July 1.

Does anyone have any experience with this? Either adding FSD on before delivery on an already built VIN, or after delivery, and tax?
 

whttiger25

Member
Jun 25, 2016
580
775
Oakland, CA
They will charge you tax in any purchase scenario.
Plus, in the UI to add FSD to my car before delivery (it's inventory and already built with a VIN): the language does not indicate anything about tax!

"Additional Due: $7,000

Full Self-Driving will be added to your Amount Due. I acknowledge I will not be able to make any further changes to my vehicle."
 

whttiger25

Member
Jun 25, 2016
580
775
Oakland, CA
Funny. I have talked to two different sales reps at the same shop (Carlsbad, CA) and each gave me polar opposite responses. Yes, No.
Look at this gem of an email! :)

Hi Jonathan,



I hope you are doing well, I heard you had some questions in regards Full Self Driving’s taxes? The taxes will only be charged at time of delivery and not afterwards.



The only time it would be charged afterwards is if you did not order it now and decided to add the feature at a later time.



Please let me know if you have any other questions
 
  • Funny
Reactions: ra88it

Big Dog

Active Member
Mar 7, 2016
1,653
1,783
Irvine, CA
yes it is subject to CA sales tax if purchased after delivery. In particular, the older models need a new computer to run FSD, so something physical does 'change hands'.
 

whttiger25

Member
Jun 25, 2016
580
775
Oakland, CA
This is my current vehicle. No mention of tax! We will see if this is the same on my new one next week.
 

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mrbulk

Member
Sep 5, 2017
462
366
Las Vegas NV
Look at this gem of an email! :)

Hi Jonathan,



I hope you are doing well, I heard you had some questions in regards Full Self Driving’s taxes? The taxes will only be charged at time of delivery and not afterwards.



The only time it would be charged afterwards is if you did not order it now and decided to add the feature at a later time.



Please let me know if you have any other questions

The red highlighted line makes it sound rather clear to me. You will pay tax if you add it after delivery.
 

whttiger25

Member
Jun 25, 2016
580
775
Oakland, CA
The red highlighted line makes it sound rather clear to me. You will pay tax if you add it after delivery.
Yes, but as you can see, there is no tax when adding FSD to my 2017 AP 2.0 Model S. I will report back sometime between June 28 when I take delivery of my new LR+ and July 1 when the price goes up.
 

ucmndd

Well-Known Member
Mar 10, 2016
7,039
13,835
California
Yes, but as you can see, there is no tax when adding FSD to my 2017 AP 2.0 Model S. I will report back sometime between June 28 when I take delivery of my new LR+ and July 1 when the price goes up.
It will be added as soon as you click that “pay” button and start to check out.
 

Mr. Big

Member
Oct 23, 2019
320
325
SoCal
Will the added 7k for FSD be factored in the selling price of the car to determine the registration fee? If so, then you’ll be paying taxes in addition to the added cost to register? If that’s the case then it’ll be better to purchase it later so you’ll only be paying the tax and not the burden of the higher registration fee which you have to deal with on an annual bases when you renew the registration.
 
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whttiger25

Member
Jun 25, 2016
580
775
Oakland, CA
Will the added 7k for FSD be factored in the selling price of the car to determine the registration fee? If so, then you’ll be paying taxes in addition to the added cost to register? If that’s the case then it’ll be better to purchase it later so you’ll only be paying the tax and not the burden of the higher registration fee which you have to deal with on an annual bases when you renew the registration.
Yeah I've definitely decided to purchase after for that reason along with the chance I won't have to pay any tax at all.


As I said, with my 2017 100D (that I'm trading in for this new car), I can use the tesla app, navigate through apple pay all the way to the double click to pay final step, without tax. So based on how apple pay works, unless Tesla somehow sends me a new and separate invoice for unpaid sales tax, I could buy FSD for my current car for $3000 without paying any tax. I of course cannot take this experiment to the end, as I don't want FSD on a car I'm about to trade in. :)

Here is a downside - the $7k option won't be on my sticker, so in the case my car is totalled my insurance may not reimburse anything for it. I am using Tesla insurance and they had no clue when I called. When I add it on, I will call them again and see what they say about insuring it, but I suspect it'll be a risk I'll have to live with. I'm not even sure it'll be covered regardless of when it's added, it's still kindof an unknown.
 
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