| Author | Message | ||
| TomD (Tifosi)
Intermediate Member Username: Tifosi Post Number: 1257 Registered: 9-2001 |
yes that is a classic case of sales tax avoidance. Many retailers help instigate this | ||
| Jason Biggs (Jason179)
New member Username: Jason179 Post Number: 40 Registered: 8-2002 |
On a somewhat related topic I bought a Tag Heuer watch from a Ross Simons in the New England area and the sales person suggested that the watch be shipped to a family member or friend out of state to avoid some kind of tax..maybe sales? The fact is that Ross Simons actually SUGGESTED this.. Jason | ||
| arthur chambers (Art355)
Member Username: Art355 Post Number: 642 Registered: 6-2001 |
TomD: That same Tyco CEO also sold his 456 to a friend of mine at a very good price, maybe related to the art work, or being caught for same. Art | ||
| Martin (Miami348ts)
Advanced Member Username: Miami348ts Post Number: 2760 Registered: 5-2001 |
Here is an example of that: You buy a monitor out of state and have it shipped to your office. You use it in your office. You have to self impose your local sales tax on your out-of-state purchase. That is where everybody gets busted in an audit. | ||
| TomD (Tifosi)
Intermediate Member Username: Tifosi Post Number: 1255 Registered: 9-2001 |
be careful with this, take a look at the TYCO ceo who had art delivered out of state and then brought it back to NY. Not 100% similar but just and FYI | ||
| Martin (Miami348ts)
Advanced Member Username: Miami348ts Post Number: 2758 Registered: 5-2001 |
This is how we dealers in FL have to handle this. If you take possession of the vehicle in Florida I have to collect sales tax as a dealer. (Hendryk like your boat). Most States cooerate with FL and so I have to either charge the local State's sales tax rate or if more than 6.5% like here in Miami, only the Miami rate. If you register in most other States then you will have to either pay nothing (if less than 6.5% or the balance between what I collected and what you have to pay. Problem is those states that do not cooperate with Florida. As a dealer the dealer should tell you if you life in such a state. Then you take possession of your veheicle or boat outside of FL and only have to pay your local sales tax. Right behind the GA border we can unload the car off the trailer and you can take possession no tax to be collected. As far as the 90 days and then transfer....smells like tax evasion. I like it  | ||
| Dave (Maranelloman)
Member Username: Maranelloman Post Number: 361 Registered: 1-2002 |
This is why it's called the People's Republic of California... | ||
| Mitchell Le (Yelcab1)
Member Username: Yelcab1 Post Number: 366 Registered: 11-2001 |
By the way I bought the car from a dealer in Miami, and had it trucked directly to california. I bypassed the Florida DMV altogether. | ||
| Mitchell Le (Yelcab1)
Member Username: Yelcab1 Post Number: 365 Registered: 11-2001 |
In Northern california anyway, AAA is no longer allowed to transfer a car from out of state. That is done only at DMV. When I did my car, all they asked for is: 1. Sales receipt of 90 days or longer 2. When I brouhgt the car into the state of california (you have 10 days to register your car) No other hassle was given. Paid the license fee, and that is it. My experience was not bad, but ... I cannot speak for anyone else but myself. | ||
| Ben Lobenstein 90 TR (Benjet)
Member Username: Benjet Post Number: 758 Registered: 1-2001 |
Art - not to split hairs (since I know what you do for a living) but I did say "You bought the car with the intention of relocating there, but plans fell thru, and you are back here to stay now." towards the end of my post. Altho who would be asking you about this? the DMV doesn't always ask qestions... if the paperwork is in order the computer in front of them just tells them the amount to collect (reg & lic fees, not tax)... -Ben | ||
| James Selevan (Jselevan)
Junior Member Username: Jselevan Post Number: 128 Registered: 6-2002 |
Mike - I believe that there is no law forbidding a citizen from crossing the Ohio state line into Kentucky to purchase an item for personal use, and return to Ohio. The rub comes when you resell those items (cigarettes, liquor, etc.) If the authorities have reason to believe that you may be reselling, then you are subject to investigation. If you purchase a truckload of cigarettes or Jack Daniels, and in the absence of a very large family (maybe a legitimate likelihood in that region of the country), then the Feds might assume that you are there purchasing inventory for resale (without paying tax). With regard to an automobile, you are subject to fine if you live and work in one state and register the car in another. They would require that you register the car in the state of primary residence. However, if you paid sales tax in another state, you would not have to pay it again! Jim S. | ||
| arthur chambers (Art355)
Member Username: Art355 Post Number: 638 Registered: 6-2001 |
Matthew: I hope for your sake that no one from DMV monitors this site. The penalities for attempting to commit fraud to avoid the use tax are stupendous (sometimes equaling the purchase price of the vehicle). Art | ||
| Matthew Lemus (Mlemus)
Junior Member Username: Mlemus Post Number: 68 Registered: 8-2002 |
Sell the car you your wife or family member in cal for a $1 and pay the sales tax on the dollar. go to AAA first. Register the car. Wait 6 days and the go back to AAA and transfer the car to a family member. Wait 9 days, go back and transfer it back. Story. You bought the car, gave it to your wife, she did not like it and you wanted it so.... http://www.dmv.ca.gov/vr/vr_info.htm#BM2525 worked for me. shhhhhhhhhhh. | ||
| arthur chambers (Art355)
Member Username: Art355 Post Number: 637 Registered: 6-2001 |
Ben: You can't just keep the car out of state. You must have an intent to use it out of State before you can escape the California Sales tax. The penalties are too great to try this without getting it right and complying with the law. Art | ||
| Mike Dawson (Miked)
New member Username: Miked Post Number: 42 Registered: 2-2001 |
I live near Cincinnati, Ohio which is at the intersection of Ohio, Indiana and Kentucky. The metro area extends into all 3 states so "interstate" purchases are quite common here. Most car dealers even advertise the fact that "out of state" customers don't pay sales tax to the state which the dealer is in. However one does pay sales tax to the state in which one lives, collected at the time of registration. Most dealers will collect and forward the tax as a way of including it in the financing arrangement. This 3 state situation does have some advantages. For example, cigarettes are cheap in KY, liquor is cheap in KY and IN due to lower state taxes so Ohioians regularly shop there and bring their purchases back to Ohio. The Ohio government counteracts by sending agents to stores just across the border to radio back when a car bearing Ohio plates leaves the store. Ohio police stop the car as it crosses the border into Ohio arresting the driver and confiscating the "untaxed" contraband. Many Ohio police Christmas parties are supplied via these "enforcement" actions. Of course KY and IN storeowners are not happy with this harassment of their customers so sometimes the "out of state" agents are "detained" by the local police. The whole situation gets quite comical near the end of the year as people stock up for New Years Eve, sometimes dozens of cars are pulled over along the highway just inside of the Ohio border. The bottom line is that government employees at the DMV or any other dept. work hard to maximize the collection of tax revenue, after all their lucrative career depends on it. | ||
| Ben Lobenstein 90 TR (Benjet)
Member Username: Benjet Post Number: 757 Registered: 1-2001 |
Here is an outline of what some do.... car is bought in CA (used car) without CA plates, by a CA resident, put a NV addy on the paperwork (there is a special CA form for out of state sales - required by dealers to get them out of collecting the tax), have car shipped to NV. No earlier than day 91 (wink) return car to CA, get the car smogged, then do an "out of state" inspected by CHP/DMV, register, no tax either place. Never get car reg'd in NV. You bought the car with the intention of relocating there, but plans fell thru, and you are back here to stay now. For "new" cars the vehcile will have to have 7500 miles on it before it will be "allowed" back into CA, without tax. -Ben | ||
| Edward Gault (Irfgt)
Intermediate Member Username: Irfgt Post Number: 1898 Registered: 2-2001 |
I purchased my new Corvette in Georgia and they collected the Florida sales tax and sent it in to Florida since I am a Florida resident. I was not charged Georgia sales tax. If you transfer your title to Florida from another state in which you moved from, you are not charged any sales tax. For a while they collected an "Impact Fee" of about $300.00 per car that you brought in from another state but someone sued them and they had ti give it all back. I got about $1200.00 in the mail since I had brought in 4 cars when I changed residency from S.C. to Fla. | ||
| Henryk (Henryk)
Junior Member Username: Henryk Post Number: 237 Registered: 8-2001 |
James: It seems that we both understand this. My feeling is just.....pay the tax in your home state and enjoy the car. If I were to move to CA, and become a resident with a job, then I would be able to bring all my cars with me, and not pay any CA tax, except for license,etc. When I moved to WI from ILL, I paid no tax.....I did have to give up my ILL driver's license and pay for the registration of the car, but that I expected. I read were one can be hit with sales tax twice, and it is legal!!!! In the boating industry, if an out-of state person buys a yacht in Florida, and uses it there for the next 30 or 60 days, then he is charged FL tax.....when he brings the boat back home, he is taxed again....interesting! FL doesn't want people to buy boats there, use them there, and then take them home. | ||
| James Selevan (Jselevan)
Junior Member Username: Jselevan Post Number: 127 Registered: 6-2002 |
Henry - I understand. When purchasing the car in Illinois, and registering in Wisconsin, you pay Wisconsin tax. I was only suggesting that sales tax is paid once. There was an earlier post suggesting otherwise. If you purchased AND registered in Illinois, then you would not have to pay sales tax again when re-registering in Wisconsin. This is inefficient as you are paying registration fees twice. As far as value for computing sales tax, in California they ask to see the bill of sale. This may be a formal contract, as from a dealer, or a napkin when the deal is consummated between two individuals. Read between the napkin sheets. The automobile club simply asked what the sales price was. They did not ask to see the sales contract (or napkin). When purchasing from a dealer (in California) they take car of sales tax reporting and registration, thus one has no "flexibility" in sale price declaration. Jim S. | ||
| Henryk (Henryk)
Junior Member Username: Henryk Post Number: 236 Registered: 8-2001 |
James: I live in WI and buy my Ferraris in ILL (Chicago area); the most recent one being 2 months ago (BBi). I was not given the option of paying ILL tax. On the ILL. form, when the "out-of-state sale" box is marked, as it had to be in my case, then one, automatically, is exempt from ILL sales tax. This was always the case in all the sales, even from different dealers. I have to admit I didn't push the matter. (ILL sales tax is much higher than that of WI) As far as "documenting the tax was paid, by having an ILL registration", there is no way I could ever register the car in ILL, since I neither own a home there, nor am I a resident of the state. I assume by register, you mean title and plates. To complicate things: After purchase, I was given an ILL 10 day drive-away sticker. I assumed that this would allow me to drive the car in WI.....NO WAY.......I got stopped by a Trooper, and was told that that sticker is not valid in WI, because I am a WI resident, and the sticker was from ILL.....he was nice about it, and I didn't get a ticket. The sticker would have been good in WI if the buyer was someone from ILL, and just visiting WI. WI residents have two days to either get the car registered, or put it away, until such time. | ||
| Robert Callahan (Rcallahan)
New member Username: Rcallahan Post Number: 8 Registered: 7-2002 |
Thanks for the info Art. I'm not trying to do anything illegal but just want to minimize fees paid. Bob | ||
| arthur chambers (Art355)
Member Username: Art355 Post Number: 633 Registered: 6-2001 |
Robert: contrary to what some say, I was NOT advocating tax fraud. HOWEVER, if you do have a place in Oregon, and plan to use it in Oregon, and THEN change your mind, and the vehicle is kept out of California for at least 90 days, there is really nothing DMV can do to collect the taxes. If you use this for a PLOY then expect to get caught, but if you have the place in Oregon, go up to use the car while it is there, and then bring the F355 back to California, there should be no tax. IMHO Art | ||
| Nick Berry (Nickb)
New member Username: Nickb Post Number: 9 Registered: 8-2002 |
I believe sales tax in Nevada is 5.6%. However it is on the depreciated value of the car. They have a chart and it is very favorable to the car owner. Only draw back is you need to have the car inspected and if you register it in Las Vegas need a yearly smog check (which means you need to take the car there.)If in counties where smog is not required you can renew on line. How is CA assessing the value of the car for registration purposes. I really do not know though I have two cars registered here. | ||
| James Selevan (Jselevan)
Junior Member Username: Jselevan Post Number: 126 Registered: 6-2002 |
Just went through this. You pay sales tax once (only), typically in the state where the sale took place. If you pay sales tax in Illinois, then you will not have to pay sales tax in California. You will pay registration fees, however. If you buy in Illinois, but do not pay sales tax in Illinois, then you will pay sales tax when registering in California. All you need is documentation of having paid sales tax, which is typically the Illinois registration. To save money, purchase car in Illinois and do initial registration in California. Pay California sales tax and registration fee, but at least you do not have to pay registration fees twice. The alternative is to pay sales tax in Illinois at Department of Motor Vehicles, but NOT register in Illinois. This only makes sense if Illinois sales tax is substantially less than California. Jim S. | ||
| Robert Callahan (Rcallahan)
New member Username: Rcallahan Post Number: 7 Registered: 7-2002 |
Yes, it was a surprise. I'm a native Californian that for the last 10-12 years lived in Florida due to work. Before I moved to Florida I had heard that CA had wanted to start collecting tax from people that would go to NV or OR to escape the high CA tax. When I moved back to CA last year, I had my cars registered in CA with nominal fees. When I tried to register the F355 I showed them the bill of sale (no tax) then they hit me with the $12,000. I balked and ended up paying $950 for the registration and they gave me a 60 day temp tag (they still want the remaining user tax). The Oregon cottage ploy sounds good and I am diffinatly joining AA. Bob | ||
| Henryk (Henryk)
Junior Member Username: Henryk Post Number: 235 Registered: 8-2001 |
It would seem to me that you will have to pay State tax regardless where you register it. As far as no tax in Oregon, I don't think simply "renting a cabin" would work. I would think that you would have to be, and prove, legal residence of that State. Are DMV's really that stupid? Think about the legal ramifications in the event of a personal injury accident with the car, where it was found out (and it will) that you have "faked" the registration in order to avoid tax. Was it REALLY a surprise, that when you bought the car, that CA would require you to pay tax? | ||
| arthur chambers (Art355)
Member Username: Art355 Post Number: 631 Registered: 6-2001 |
Robert: I would register the car in Oregon where there is no sales tax. I would also rent a cottage by the water, and keep the car there. That provides you with a reason for registration of the vehicle in Oregon (a valid one) and I'd use the cottage. That way you had a REAL reason for the out of California registration, and if California were to attempt to collect the tax, calling the out of State registration an attempt to evade California Tax, you have a valid reason for what you did. While the statute says 90 days, I would keep the car out a little longer than required. Art | ||
| Lou B (Toby91)
Junior Member Username: Toby91 Post Number: 83 Registered: 4-2001 |
Ed your right but if you register the car for more than 6 months out of state there is no tax plus you don't have to physicaly present the car in FL. Download a FL VIN verification form and take the car to any registered dealer in the country. FL is a great state to register: only 1 plate, no emmision inspection at all in most counties and no ugly winshield sticker. I did this on two of my F-cars. | ||
| Edward Gault (Irfgt)
Intermediate Member Username: Irfgt Post Number: 1894 Registered: 2-2001 |
If you register a car in Florida and purchase it from out of state you have to pay Florida sales tax on it at 6% plus you have to physically take it there for them to see the VIN#. You will also have to have a Florida address as a resident. | ||
| Dr. Mike Adams (Drmike)
New member Username: Drmike Post Number: 2 Registered: 5-2002 |
If you do decide to kep the car out of state for 90 days, ( I did this twice ). Make sure you go to the AAA to register the car rather than the DMV. The DMV tries like HELL to make you pay the sales tax anyway. They require forms from the state dept of equalization that are damn near impossible to get. They grill the hell out of you and ask for all kinds of paperwork proving that you have been DRIVING the car out of state. I did my first Ferrari at the DMV and it was a nightmare. I took my 2nd to the AAA office and was shocked when they just said "ok"... and handed me my plates and tags. Easily worth the AAA dues for that alone | ||
| Robert Callahan (Rcallahan)
New member Username: Rcallahan Post Number: 6 Registered: 7-2002 |
Art, Mitchell, Did you have to pay sales tax in the states that you registered the car? What is the sales tax in Nev? Thanks, Bob | ||
| Ben Lobenstein 90 TR (Benjet)
Member Username: Benjet Post Number: 756 Registered: 1-2001 |
I followed the same path as Art and Mitchell, it works. -Ben | ||
| Brad Beutlich (Brad)
New member Username: Brad Post Number: 19 Registered: 3-2001 |
It's not a user fee, it's a sales tax. CA sales tax is paid on all cars in CA regardless of where you buy it. When you bring it into the state as a new purchase, you must pay sales tax. I suspect that your $12,000 fee also includes the reg. fee. Sucks to live in CA but where else can you drive a great car 12 months out of the year with the top down. Unless you have a home out of state, I'd pay the fee. | ||
| Mitchell Minh Le (Yelcab1)
Member Username: Yelcab1 Post Number: 361 Registered: 11-2001 |
Robert, Keep your car out of the state of California for 90 days (not 120 days). Then, when you go to register it, produce a receipt that is 90 days old, tell them you took delivery 90 days before, and kept it out of california that long, and now you want to register it in california and that you have just brought it in (no explanation necessary). And watch the "user fee" disappear. I just did it ! | ||
| Robert Callahan (Rcallahan)
New member Username: Rcallahan Post Number: 5 Registered: 7-2002 |
I don't know what I am going to do but I do NOT feel like paying "user fees" I do have a company in Florida. I wonder if I can register the car there without having to take it there first? Bob | ||
| arthur chambers (Art355)
Member Username: Art355 Post Number: 630 Registered: 6-2001 |
Robert: Keep the cdar out of state, register it in Oregon, use it in Oregon, after 120 days, bring it into California, and tell them that you originally intended to use the car in Oregon, but the useage failed, and you should not owe any use taxes. Check to competent tax counsel in Calfornia and you'll find I'm correct. Art | ||
| Horsefly (Arlie)
Junior Member Username: Arlie Post Number: 203 Registered: 5-2002 |
Shouldn't those pesky little $12,000 details have been worked out BEFORE the purchase? Looks like somebody will be shopping for ONE acre of land in another state. | ||
| acw (Acw)
Junior Member Username: Acw Post Number: 110 Registered: 2-2002 |
I don't think there is any way out unless you have a residence in another state ACW | ||
| Robert Callahan (Rcallahan)
New member Username: Rcallahan Post Number: 4 Registered: 7-2002 |
I recently purchased a F355 spider from a MB dealer in chicago. The car arrived in beautiful condition. I just love this car. I love to drive it, to sit in it, and to just stare at it. I have to thank God for being lucky enough to own such a car!! My problem- I went to register the car in Santa Barbara (where I live) and they wanted about $12,000 as a User Fees because I did not pay sales tax in Illinois! Has anybody else been up against this? Is there anyway out? Bob |