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Too Late to order a Sales Tax Exempt Model X?

Discussion in 'Northwest' started by PeterB, Jun 6, 2013.

  1. PeterB

    PeterB Member

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    The current WA sales tax exemption is scheduled to end in July 2015. With Model X deliveries starting in late 2014, even if the rollout goes more quickly than the Model S, it seems marginally likely that you could still order a Model X and get it in time for the exemption.

    Unless of course Inslee is able to get it extended - Fingers crossed

    So just in case, we reserved Model X #3835 last week. :smile:
     
  2. Seattle

    Seattle Member

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    Will they add new production capacity for the X or just move S production over. Too early to say, but if sales keep exceeding production capacity they should. With a production rate of 1666 S cars/month today, I'd say its very likely we'll get 3800 Xen by the 6th month.
     
  3. Palpatine

    Palpatine Banned

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    I had this same thought about ordering a Model X. But I think it will be too late to get it in time for the sales tax holiday if it does expire on January 1st, 2015 as it is currently scheduled. It likely just depends on the state government finances at that time.

    The other thought is this. Perhaps take delivery down in Portland Oregon? They don't have a state sales tax. Or is there something in place to catch Washington residents and prevent us from doing that?
     
  4. Jackyche

    Jackyche Member

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    When you register the car in Washington, they'll ask you for fork over the sales tax unless it came from a state that had sales tax.

    There's no legal way around it, believe me, I checked and researched. There is of course, plenty of illegal ways of doing it.

     
  5. PeterB

    PeterB Member

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    The store had told me the exemption expires on July 1, 2015, however this RCW seems to contradict itself, mentioning both January 1 and July 1 (Line 4).

    http://apps.leg.wa.gov/RCW/default.aspx?cite=82.08.809

    Does anyone have more solid information to contribute on the actual expiration date?
     
  6. Palpatine

    Palpatine Banned

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    July 1st , 2015 would make more sense for the expiration date. That would be the end of the state's fiscal year.
     
  7. richkae

    richkae VIN587

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    Yes. That is a very bad idea.
     
  8. Tacket

    Tacket Member

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    I believe after 90 days you can bring a car into the state without sales and use tax, at least that's what happened to me when I moved from Oregon to Washington. Although I did have a valid Oregon ID and valid Oregon address when it all went down.
     
  9. Palpatine

    Palpatine Banned

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    Why? What happens?
    They say no? I can live with that.
    They beat you with a wet noodle? Won't hurt much.

    Seriously, let's leave the drama out of it and just discuss what happens. If there is a system in place to collect the sales tax of someone moving a car from Oregon to Washington, so be it. But I doubt there is any sort of extra penalty if they "catch" you. Do they charge 20% instead of the normal sales tax? No. So just discuss the facts of what happens in that situation.
     
  10. richkae

    richkae VIN587

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    I remember stories of people trying to buy cars and expensive RVs in Oregon and bring them in to Washington state. If they caught you and decided you were trying to defraud the state of taxes you would pay a big fine. I may not remember correctly but I think in the case of the RVs the fine was 6 figures. People have tried. The state knows. The state really doesn't like people who try to avoid taxes.
     
  11. kilpatds

    kilpatds Member

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    When you register the car, if it is less than some number of years old (I think 3?) and was not bought in-state you need to pay a fee ... that fee is roughly equal to the sales tax you would have paid.
     
  12. adiggs

    adiggs Active Member

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    My understanding is that Oregon and Washington have a sales tax agreement in place. For something like car sales, the dealership will be collecting sales tax for the state of registration of the vehicle. An Oregonian can purchase a car sales tax free from Washington, as long as it will be registered in Oregon. Vice versa, a Washingtonian purchasing a car in Oregon will still have sales tax collected and forwarded to Washington.

    I am confident that Tesla will be in full compliance with that agreement. You would also need an Oregon address, and be registering the car at that Oregon address, to avoid the sales tax.


    Sort of how you'd expect it to work among reasonable states :)

    Now if we could just get California on board, there'd be this whole cottage tourism industry springing up, of new Tesla owners taking delivery at the factory, and going on a road trip to get home. Some of them would hang out in California for a few extra days or weeks seeing the sights, and spending their money (as tourists frequently do).
     
  13. Palpatine

    Palpatine Banned

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    It would seem to me there are plenty of ways around it. We are talking about a $8,000 to $9,000 tax bill here.
    Is it illegal for Microsoft to move their licensing to a tax friendly state? Nope.
    Is it illegal for corporations to structure their assets in tax friendly countries like Ireland? Nope. It is just smart tax planning.

    I have no problem registering a Model X in Oregon for a few months if that is what is required to minimize an $8,000+ tax bill.
    I have plenty of friends with addresses there that I could utilize. Whatever the loophole, I am game to try it. If Washington wants to try a penalty, I would just ignore it and leave the car registered in another state while I drive it here.
    We have a moral obligation to ignore bad laws. Taxing EVs in their infancy is one of those bad laws. :)
     
  14. Jackyche

    Jackyche Member

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    I sense much anger in you. Anger leads to hate. Hate, leads to suuufferring.

    :)

     
  15. PhilBa

    PhilBa Active Member

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    Lots of thoughts in reading this thread.

    First, I doubt they will extend the sales tax holiday after hatchet jobs like the KOMO (?) story on rich people buying luxury cars and avoiding sales tax.
    Second, having been a resident of both states in question, I've seen lots of people trying to dodge the sales tax, unsuccessfully. Note that you have 90 days (well used to, I don't know what it is now) to register it in WA after moving here. If you get pulled over (like I was), have a >90 day out of state registered car (like I did) and a WA driver's license (like I did) you will get a ticket. Since my car was several years old, it wasn't terribly high but the cop did mention that I was lucky it wasn't a new car as I would have had to pay sales tax on it.
    Finally, moral obligation or not, you are running the risk of fines on top of taxes.

    Frankly, I think the tax holiday is a dumb idea as it really didn't materially increase the sales of EVs. Well, certainly not Teslas in WA - if you can afford a model S and all that. I kind of doubt any other EVs either since, even with the federal tax credit and sales tax holiday, the out of pockets costs are still higher than a similar class ICE. People that buy EVs are believers and early adopters. Price doesn't become a factor until the product "crosses the chasm" to the mass market. The legislators passed the bill so they could claim how very green they are. Yes, I'm a complete cynic where politicians are concerned.
     
  16. ChadS

    ChadS Petroleum is for sissies

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    Hi Phil,

    I fully agree with the first half of your post. But on the second half, I have talked to MANY owners in WA that were affected by the sales tax waiver, myself included. I agree that a lot of Tesla owners weren't, but it has definitely helped with EV sales.

    I also very strongly disagree that BEVs cost more. I have spent a lot of time analyzing TCO costs for BEVs (and published a lot of the results), and they all seem cheaper than comparable gas cars. Of course you have to use a comparable gas car, not a Yaris. That also assumes the incentives, and they are not always a lot cheaper. But when owners are surveyed, saving money is their number 1 reason for buying the car (again, that is likely less the case with Tesla owners; I haven't seen such a survey in the past few months that would include them).

    IIRC, when the WA legislation was passed, much of the discussion was on the long-term financial impact to the state of owners buying local fuel.
     
  17. PhilBa

    PhilBa Active Member

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    I think it's hard to prove or disprove either assertion there but in general, sales of EV have disappointing nationwide. The federal tax credit should have moved the meter much more than the WA tax holiday. I'm sure the WA tax holiday did influence some sales but really don't think it was a major factor and certainly not the primary one. I firmly believe that, for the most part, EV sales were to the faithful.

    Total cost of ownership - you have a totally valid point that it does pencil out. While smart consumers like you do the math, I am skeptical that the majority thinks that way. It is well documented consumer behavior that up front costs weight more heavily than long term ones. Also, I believe that many, if not most, consumers' eyes just glaze over when presented with a TCO analysis. Even the delayed "refund" of the federal tax credit on EVs may be a stretch for consumers (up to 15 months away). Also, an EV buyer will likely need some upgrade work in their garage for a charger outlet so there are some additional up-front costs.
     
  18. Jackyche

    Jackyche Member

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    Just me personally, I wouldn't have considered the Model S without the sales tax exemption.

    I almost cancelled my Roadster when I found out there's sales tax on used EV's.

    I changed my S reservation to a X. If I can't get the exemption, I'll prob cancel that.

    Just me.
     
  19. Lloyd

    Lloyd Active Member

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    Might it be beneficial for WA residents to upgrade to Signature on the model X to assure an earlier delivery?
     
  20. Jackyche

    Jackyche Member

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    If you're set on buying one, I'd say good idea to do so.

    And WA law req's escrow so your money is safe even if Tesla goes under for whatever reason.

    Time to hit Vegas for that 40k. Come on #7.
     

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