TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker or making a Paypal contribution here: paypal.me/SupportTMC

Very good article showing the laws for selling Tesla - state by state

Discussion in 'Tesla Motors' started by buzzbar, Mar 15, 2014.

  1. neroden

    neroden Happy Model S Owner

    Joined:
    Apr 25, 2011
    Messages:
    3,583
    Location:
    Ithaca, NY, USA
    Andrew Cuomo is disgusting. I suppose he wants to lose all that sales tax revenue.

    You see, if I buy the car directly from California, New York gets no sales or use tax on it -- the California rate is higher, and the NY use tax is cancelled out by subtracting the tax paid to California.

    And Deborah Dorman is a liar. It is very clearly legal in NY for a manufacturer to sell cars directly, *provided that they do not have any franchised dealerships*. The law was written correctly back when it was written.
     
  2. TexasEV

    TexasEV Active Member

    Joined:
    Jun 5, 2013
    Messages:
    3,796
    Location:
    Austin, TX
    Not true. You don't get credit for CA tax because you were not REQUIRED to pay the CA tax. CA does not charge sales tax when the car is temporarily registered to an out-of-state buyer.

    Ironic that someone who is always complaining about something Tesla's lawyers did or didn't do, would be giving bad tax law advice.
     
  3. andrewket

    andrewket 2014 S P85DL, 2016 X P90DL (soon 100)

    Joined:
    Dec 20, 2012
    Messages:
    5,047
    #4 andrewket, Mar 16, 2014
    Last edited: Mar 16, 2014
    Are you sure this is true? I believe it is true for most states but I thought California was different. Even as an out of state buyer if you take possession in California you must pay sales tax. I've run into this before when I was considering buying a car that was at a dealer's lot in CA. They offered to transport the car to Las Vegas and have me take possession there to get around it. Most other states have a clause that allows an out of state buyer to take possession without paying sales tax and obtain a 10-day temporary "drive away" registration so that you can legally drive it out of the state.

    update:

    Regulation 1620

    (3) SALES PRECEDING MOVEMENT OF GOODS FROM WITHIN STATE TO POINTS OUTSIDE STATE.
    (A) To Other States—When Sales Tax Applies. Except as otherwise provided in (B) below, sales tax applies when the property is delivered to the purchaser or the purchaser's representative in this state, whether or not the disclosed or undisclosed intention of the purchaser is to transport the property to a point outside this state, and whether or not the property is actually so transported. It is immaterial that the contract of sale may have called for the shipment by the retailer of the property to a point outside this state, or that the property was made to specifications for out-of-state jobs, that prices were quoted including transportation charges to out-of-state points, or that the goods are delivered to the purchaser in this state via a route a portion of which is outside this state. Regardless of the documentary evidence held by the retailer (see (3)(D) below) to show delivery of the property was made to a carrier for shipment to a point outside the state, tax will apply if the property is diverted in transit to the purchaser or his representative in this state, or for any other reason it is not delivered outside this state.
    (B) Shipments Outside the State—When Sales Tax Does Not Apply. Sales tax does not apply when the property pursuant to the contract of sale, is required to be shipped and is shipped to a point outside this state by the retailer, by means of:
    1. Facilities operated by the retailer, or
    2. Delivery by the retailer to a carrier, customs broker or forwarding agent, whether hired by the purchaser or not, for shipment to such out-of-state point. As used herein the term "carrier" means a person or firm regularly engaged in the business of transporting for compensation tangible personal property owned by other persons, and includes both common and contract carriers. The term "forwarding agent" means a person or firm regularly engaged in the business of preparing property for shipment or arranging for its shipment. An individual or firm not otherwise so engaged does not become a "carrier" or "forwarding agent" within the meaning of this regulation simply by being designated by a purchaser to receive and ship goods to a point outside this state. (This subsection is effective on and after September 19, 1970, with respect to deliveries in California to carriers, etc., hired by the purchasers for shipment to points outside this state that are not in another state or foreign country, e.g., to points in the Pacific Ocean.)
     
  4. ZBB

    ZBB Emperor

    Joined:
    Feb 27, 2013
    Messages:
    1,419
    Location:
    Scottsdale
    Both you and TexasEV are correct -- depending on where you take possession.

    If you take possession in CA, then you will pay CA sales tax. If you take possession outside CA, then there is no CA sales tax on the sale.

    For those of us in states that don't allow Tesla to directly sell, Tesla arranges the sale so you don't take possession in CA. When I bought mine, I had to sign a certification that I would not take delivery in CA. When I took it to the AZ MVD to register it, I was charged AZ use tax...
     
  5. glhs272

    glhs272 Unnamed plug faced villian

    Joined:
    Aug 21, 2013
    Messages:
    791
    Location:
    Burlington, WI
    When I bought my car, the deal was that you pay the sales taxes in the state you registered it. In Wisconsin there are no Tesla service centers to deliver direct to Wisconsin customers. I paid the sales tax in Wisconsin when I registered the car. There was no double dipping by the states on taxes.
     
  6. TexasEV

    TexasEV Active Member

    Joined:
    Jun 5, 2013
    Messages:
    3,796
    Location:
    Austin, TX
    Exactly. When I bought mine I paid TX tax, not CA. Neroden described buying the car "from California" as all of us in non- sales states do. He is not required to take possession there, not required to pay tax there, so he doesn't get credit in NY for taxes paid elsewhere because he wasn't required to pay them.
     
  7. neroden

    neroden Happy Model S Owner

    Joined:
    Apr 25, 2011
    Messages:
    3,583
    Location:
    Ithaca, NY, USA
    I was assuming California pickup. For some reason, which doesn't really make sense, does it? (I guess because my family has bought cars in California and driven them back to NY before.)

    - - - Updated - - -

    OK, I take your point. Most people would probably just take the direct drop-ship rather than travelling to pick up the car.
     
  8. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

    Joined:
    Jul 12, 2012
    Messages:
    4,503
    Location:
    Maine
    If you pick the car up at a CA location you would be required to pay sales tax.

    If CA cut their sales tax on BEVs I'm certain there would be a much larger number of factory pick-ups (to get the tour), and it could really scare some states.
     
  9. lolachampcar

    lolachampcar Active Member

    Joined:
    Nov 26, 2012
    Messages:
    4,454
    Location:
    WPB Florida
    Wow, someone actually did some homework and wrote a piece indicating independent thinking.
    Very Nice!
     
  10. andrewket

    andrewket 2014 S P85DL, 2016 X P90DL (soon 100)

    Joined:
    Dec 20, 2012
    Messages:
    5,047
    I did the same thing - I'm in Virginia. I took possession in VA, but transfer of ownership took place in CA, and then Tesla shipped the car via common carrier. I paid VA sales tax. My comment earlier was to the poster who was saying as an out-of-state resident you could take delivery in CA and not pay CA tax. This is not correct. There are states that allow this. I purchased and took possession of a vehicle in Ohio when I lived in Illinois. I received a 10-day temp Ohio registration and did not pay Ohio sales tax. I immediately paid Illinois sales tax when I registered the car. CA does not permit this.
     
  11. djplong

    djplong Member

    Joined:
    Apr 3, 2013
    Messages:
    248
    Location:
    NH
    A guy I used to work for told a story that might have bearing on this.

    He had a friend that lived in New Hampshire. The guy bought a car, registered it here in NH and had it for an amount of time I can't remember. Some moths at least had passed when he decided to move to Massachusetts to be closer to work. After moving, he went to change the registration on his car from NH to MA and they demanded sales tax from him.

    He refused to pay. He packed his belongings and moved back to NH within weeks.

    As he was travelling back with the moving truck and convoy of cars with friends helping him, he pulled over at the NH/MA state line. He stood in NH, unzipped his fly and.. Well.. Let's say he graphically expressed his opinion into Massachusetts.

    I wonder how long you have to hold on to a car before some state you move into wont try to extort sales taxes from you.
     
  12. neroden

    neroden Happy Model S Owner

    Joined:
    Apr 25, 2011
    Messages:
    3,583
    Location:
    Ithaca, NY, USA
    My NY Assemblyperson, Senator, and (FWIW) Cuomo have been emailed, telling them that it's idiotic for them to chase out a store which is generating millions of dollars in sales tax, much of which will go to California if they ban Tesla stores.

    Everyone else in NY should send the same message to their Assemblyperson, Senator, and Cuomo. We'll see how in the pocket of the dealers lobby they are... sales tax receipts from car sales are actually meaningful numbers in this state and it might sway them.
     
  13. lolachampcar

    lolachampcar Active Member

    Joined:
    Nov 26, 2012
    Messages:
    4,454
    Location:
    WPB Florida
    I'm confused about this sales tax issue. It was my understanding the sales tax goes to the state where the car is registered (bring you MSO to the DMV, pay tax and tag and leave with a registration) so how does NY differ and thus loose the sales tax revenue?
     
  14. Lloyd

    Lloyd Active Member

    Joined:
    Jan 12, 2011
    Messages:
    4,886
    Location:
    San Luis Obispo, CA
    You are required to pay CA tax IF the wheels touch the public roadway in CA. You can pay to have the vehicle transported via common carrier outside the state and then not pay the tax.

    Other states will allow you a temporary registration to take the vehicle to the state where it will be registered and pay the tax there. CA used to do this also, but felt in some instances that they were not getting their due tax.
     
  15. lolachampcar

    lolachampcar Active Member

    Joined:
    Nov 26, 2012
    Messages:
    4,454
    Location:
    WPB Florida
    I love it. I should have gotten a FL temp tag, had my MS transported across the state line then driven back for a factory tour while offering Sacramento the middle finger. Oh well, maybe next time.
     
  16. Al Sherman

    Al Sherman It's about THIS car.

    Joined:
    Nov 29, 2012
    Messages:
    1,692
    Location:
    Batesville, IN
    We thought about it. Really wanted to fly out and drive the car home but it would have been a VERY expensive factory tour. So maybe when we get the MX. :smile:
     
  17. lolachampcar

    lolachampcar Active Member

    Joined:
    Nov 26, 2012
    Messages:
    4,454
    Location:
    WPB Florida
    I suppose if you have no vehicle manufacturing in your state there is no reason to consider the lost revenue from making a factory pick up cost prohibitive. Now that there is revenue to be had, I'm sure the state will reconsider and provide a carve out for Tesla. Like NY, CA will not miss an opportunity to extract cash.
     
  18. hcsharp

    hcsharp Active Member

    Joined:
    Jun 7, 2011
    Messages:
    2,537
    Location:
    Vermont
    That's probably because NH never charged your friend a penny of sales tax to begin with. NH only has an annual property tax of sorts. MA gave him no credit because no sales tax was ever paid in NH. If he had bought his car in VT, he would have been given credit by MA for the VT use tax paid previously.
     
  19. 772

    772 Member

    Joined:
    Oct 9, 2013
    Messages:
    712
    Location:
    Iowa
    Florida has the same law as CA in this regard... regardless of where the car will ultimately be registered, if you drive it in FL, you pay FL sales tax.
     

Share This Page