Will car sales tax change if you purchase AP after you buy the car?

[shelbri]

In CT, we pay sale tax of 6.35% for cars less than $50k and 7% for cars above. So keeping the options down and paying 6.35% at the time of purchase would save a few bucks. Items purchased after sale, would be taxed at 6.35% as it would be considered an accessory and not part of the original purchase price.

Really isn't worth it though as Tesla's after sale price (i.e., +1k for EAP on Model S) more than negates the sales tax savings.

 

[rxlawdude]

Does Tesla charge it though?

Someone in a post higher up implied that they did. We have confirmation from someone who had it done post-purchase and it was not taxed.

 

[SageBrush]

I was thinking about this in relation to my home state of Colorado. Sales tax on the car and subsequent ownership tax each year add up to ~ 8% of purchase price, or about $400 for the car I am leaning towards if I defer payment till later.

That is the tax part; Tesla's charge to delay remains to be determined but if I have to choose between sending the same amount of money to Tesla or my state, it will be an easy choice.

 

[brucet999]

Just a quick thought, does anyone know if you pay sales tax on the vehicle purchase price plus the options or just the vehicle's price?

If so, based on the configurator screen shots it looks like Tesla wont charge you a premium if you activate auto pilot after your car is shipped. That would bring the total cost of the car down when purchasing. Then you pay tax on that amount and upgrade to AP later. Right?

So essentially you'd save 7.5% on the $5000 AP option (7.5% for CA) = totals about $375. More if you ourchase the go fund me $3000 AP option on top of that. Just a thought...

Does anyone with a model S have any experience with retroactively buying AP and if there were taxes included?

Thanks,

Similar features added after initial purchase of Ms have been $500 more expensive than if purchased with the car. I would not expect that Tesla will change that pattern with M3.

 

[Foxhound199]

OK, but he doesn't say it will be the same price.

Who suggested it would be?

 

[Canuck]

In BC, our $5k EV rebate does not apply to vehicles costing $77kCAN or more. Plus, we have a "Luxury surtax" added to vehicles when the value for tax exceeds:

$55,000 to $55,999.99 7% plus 1% PST
$56,000 to $56,999.99 7% plus 2% PST
$57,000 and over 7% plus 3% PST

That's in addition to 5% GST. So if your Model 3 is $77,000 or more you will get no rebate and pay 15% or $11,550 just in taxes.

A fully loaded Model 3 may go above $77kCAN given the exchange rate so I can see a lot of savings ordering AP after the vehicle purchase, even if it does cost extra, if you can get it under $77k to get the $5k rebate plus save a bit on taxes.

 

[ChadS]

For example, it may actually be worse (in some states like Washington) to pay for the feature later.

This definitely varies by state...and by time. And by price. And by option.

Not long ago in WA, EVs were exempted from sales tax. So were batteries and charging equipment. So, aside from those, it was cheaper to buy an option with the car rather than later.

This is still possible. Say the new LEAF is $25k and there's a $3k option (that is not battery or charging related). Sales tax would be waived on all $28k if you purchased it with the new car. But if you added the $3k option later, you would have to pay sales tax on it.

HOWEVER, under current rules, the sales tax waiver is limited to $3,200, which is covered by the Model 3 base price. So this doesn't apply to any Model 3 options, because the sales tax for the option won't be waived on the purchase, so you'll have to pay it no matter when you buy it. (And, any car with a base price over $42,500 doesn't get any sales tax waived, so nothing applies to S and X buyers).

And just to make it more fun, note that the whole WA sales tax waiver will expire soon, probably in early 2018, although it is hard to get numbers from the state to figure out exactly when it will happen (there is another thread on that).

Whew. All of this is just for WA; those of you outside of WA are on your own deciphering the local laws.

 

[BioSehnsucht]

Another wrinkle may be whether you prefer to pay for it out of pocket (buy afterwards) vs lumping it into your financing - depending on your financing, the additional principle (and thus interest) in your loan might be worse than the separate taxes plus Tesla's higher price to activate after purchase.

 

[gregincal]

Who suggested it would be?

This thread? Go back and read the initial post, that's the entire premise of the thread. Otherwise waiting makes no sense even if they don't charge sales tax, you'll be paying more anyway.

 

[Big Dog]

"In California, we have to pay sales tax on software unlocks later on, so it doesn't make a difference."

If Tesla is collecting sales tax for the OTA update, it is violating California law. An OTA update is an electronic delivery. There is no tangible property to tax. Transactions not involving tangible personal property, such as the sale of services or the sale of intangible personal property, are not subject to the sales tax.

I was thinking the same thing. Our SoCal software company no longer has to collect sales tax from customers since we went to electronic delivery.

 

[Big Dog]

always love the optimism of people. As far as I can see, the configurator doesn't say that it's possible to add it at all later, but you assume that means that you can and it won't cost extra.

It's a no brainer for Tesla. Let's say in three years, Elon wants to raise some cash. He can offer a flash sale on AP to all of those who stood in line March 31. (special treat) Any money so raised is 100% revenue and profit since there is virtually no cost of goods..

 

[ChrisH]

This definitely varies by state...and by time. And by price. And by option.

Not long ago in WA, EVs were exempted from sales tax. So were batteries and charging equipment. So, aside from those, it was cheaper to buy an option with the car rather than later.

This is still possible. Say the new LEAF is $25k and there's a $3k option (that is not battery or charging related). Sales tax would be waived on all $28k if you purchased it with the new car. But if you added the $3k option later, you would have to pay sales tax on it.

HOWEVER, under current rules, the sales tax waiver is limited to $3,200, which is covered by the Model 3 base price. So this doesn't apply to any Model 3 options, because the sales tax for the option won't be waived on the purchase, so you'll have to pay it no matter when you buy it. (And, any car with a base price over $42,500 doesn't get any sales tax waived, so nothing applies to S and X buyers).

And just to make it more fun, note that the whole WA sales tax waiver will expire soon, probably in early 2018, although it is hard to get numbers from the state to figure out exactly when it will happen (there is another thread on that).

Whew. All of this is just for WA; those of you outside of WA are on your own deciphering the local laws.

EVs are sales tax exempt in WA?! Holy crap that's huge. Wish they would extend that.

 

[MIT_S60]

"In California, we have to pay sales tax on software unlocks later on, so it doesn't make a difference."

If Tesla is collecting sales tax for the OTA update, it is violating California law. An OTA update is an electronic delivery. There is no tangible property to tax. Transactions not involving tangible personal property, such as the sale of services or the sale of intangible personal property, are not subject to the sales tax.

They charged me tax for the 60->75 upgrade. It's even listed as tax on the email receipt.

 

[WARP 10]

They charged me tax for the 60->75 upgrade. It's even listed as tax on the email receipt.

Yep, you get to the 'Buy Now' page and the total billed includes 7.25% sales tax.

 

[omar]

Wow. Super informative. Thanks everyone for their input. It was just a thought. This will be my first new car I've ever bought. Just wondering how it works. Looks like I'm stuck paying the tax anyways in CA. Thanks!

 

[Big-T]

This definitely varies by state...and by time. And by price. And by option.

Not long ago in WA, EVs were exempted from sales tax. So were batteries and charging equipment. So, aside from those, it was cheaper to buy an option with the car rather than later.

This is still possible. Say the new LEAF is $25k and there's a $3k option (that is not battery or charging related). Sales tax would be waived on all $28k if you purchased it with the new car. But if you added the $3k option later, you would have to pay sales tax on it.

HOWEVER, under current rules, the sales tax waiver is limited to $3,200, which is covered by the Model 3 base price. So this doesn't apply to any Model 3 options, because the sales tax for the option won't be waived on the purchase, so you'll have to pay it no matter when you buy it. (And, any car with a base price over $42,500 doesn't get any sales tax waived, so nothing applies to S and X buyers).

And just to make it more fun, note that the whole WA sales tax waiver will expire soon, probably in early 2018, although it is hard to get numbers from the state to figure out exactly when it will happen (there is another thread on that).

Whew. All of this is just for WA; those of you outside of WA are on your own deciphering the local laws.

Where's the other thread? I've been quite interested in trying to get some new estimates on when this will expire

 

[kengchang]

They charged me tax for the 60->75 upgrade. It's even listed as tax on the email receipt.

That's battery unlock tho, different from software. Software download doesn't charge tax in CA (Xbox etc)

 

[smak]

I always love the optimism of people. As far as I can see, the configurator doesn't say that it's possible to add it at all later, but you assume that means that you can and it won't cost extra.

Elon, I want to give you $4k for something you already gave me and you have to click a button to allow me to use it.

Elon "Nah"

-smak-

 

[ModelNforNerd]

Just a quick thought, does anyone know if you pay sales tax on the vehicle purchase price plus the options or just the vehicle's price?

If so, based on the configurator screen shots it looks like Tesla wont charge you a premium if you activate auto pilot after your car is shipped. That would bring the total cost of the car down when purchasing. Then you pay tax on that amount and upgrade to AP later. Right?

So essentially you'd save 7.5% on the $5000 AP option (7.5% for CA) = totals about $375. More if you ourchase the go fund me $3000 AP option on top of that. Just a thought...

Does anyone with a model S have any experience with retroactively buying AP and if there were taxes included?

Thanks,

I am in a similar situation here in Massachusetts. My understanding is that you will pay sales tax on both transactions...buying the car, and buying AP after the fact.


But here in MA, we also get an annual property tax bill, which takes into account the initial value of the car (what you paid on the sticker), and then an annual depreciation from there.

In my specific case, it could be worth it to get EAP, but hold off on FSD, to keep not only the initial price (and sales tax) down, but since they don't look into "aftermarket" value-adds to your vehicle, my annual property tax bill would not account for an increase in value of the car, either.

 

[K-MTG]

Any updates on this??

Is it confirmed post-delivery EAP will be $6k on the 3 ($1k more)?

Are they charging sales tax in SoCal?

In California:
If you bought first production ($49k) - Sales TAX and Registration Fees will be: $4,208
If you bought first production with EPA ($54k) - Sales Tax and Registration Fees will be: $4,628

So the difference is $420. And I would assume you can get a decent amount of credit card points on the purchase. Any credit card companies that will offer some rewards for a $5k purchase?? Figured with 5% cash back on automotive, that is $250 so I got $670 in total