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Topic: Non California resident buying a used vehicle in California. (Read 211 times) previous topic - next topic
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Non California resident buying a used vehicle in California.

         I have searched and found that buying a new vehicle in CA requires a non resident to pay CA sales tax, and that buying used, from a private party does not. My question is, what about buying used from a dealer? Are you still on the hook for the CA sales tax? I know that CA is a high tax  state, and laws probably change often to reflect that.
         Thanks in advance for information.

     Milosdad
Re: Non California resident buying a used vehicle in California.
Reply #3 –
Quote from: Linda Hylton  - 
Unless you take delivery out of state.

  Thank you. I've read through the forum, and found a lot of information that if you are buying from the LD builder, and you are out of state, it is a good idea to have it delivered across state lines.
  But, from what I've read, if an out of stater buys used from a private party, the CA sales tax is not collected. The tax would be collected when registering the vehicle again in CA. But my question is, if the out of state buyer buys a used vehicle from a dealer, does the dealer collect sales tax? There is a lot of information about a CA buyer buying an out of state car, but not a lot about if there is a difference in an out of state buyer buying from a dealer instead of a private party. It makes no sense to me why there would be a difference, but there are quite a few things that make no sense to me.
 
Re: Non California resident buying a used vehicle in California.
Reply #4 –
From the CA DMV link provided above:

"Unless an exemption applies, sales/use tax applies on the purchase of vehicles/vessels in California. If vehicle/vessel is purchased from someone who is engaged in business in California, (vehicle/vessel dealers) that person is responsible for reporting/paying the sales tax."
----
The says to me that if any person, CA resident or not, buys a vehicle from a dealer in California, s/he will pay the sales tax on the vehicle, unless an 'exemption' applies. You need to check with your home county/state for vehicle registration requirements (and possible 'exemptions') on a vehicle purchased in CA.

 Sales taxes in California vary by county and individual localities may tack on additional charges; check this site for current CA sales tax rates. (As noted, these rates may change.)

https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx
2003 TK has a new home
Re: Non California resident buying a used vehicle in California.
Reply #5 –
Quote from: Joan  - 
From the CA DMV link provided above:

"Unless an exemption applies, sales/use tax applies on the purchase of vehicles/vessels in California. If vehicle/vessel is purchased from someone who is engaged in business in California, (vehicle/vessel dealers) that person is responsible for reporting/paying the sales tax."
----
The says to me that if any person, CA resident or not, buys a vehicle from a dealer in California, s/he will pay the sales tax on the vehicle, unless an 'exemption' applies. You need to check with your home county/state for vehicle registration requirements (and possible 'exemptions') on a vehicle purchased in CA.

 Sales taxes in California vary by county and individual localities may tack on additional charges; check this site for current CA sales tax rates. (As noted, these rates may change.)

https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx


  Thank You.
Re: Non California resident buying a used vehicle in California.
Reply #6 –
"The says to me that if any person, CA resident or not, buys a vehicle from a dealer in California, s/he will pay the sales tax on the vehicle, unless an 'exemption' applies. You need to check with your home county/state for vehicle registration requirements (and possible 'exemptions') on a vehicle purchased in CA."

We bought our Lazy Daze from a dealer in San Diego, California in 2009, and had it delivered by them to us in Arizona as part of the deal.  There was no California tax, but Arizona DOES levy a state sales tax on vehicles purchased from a dealer, no matter the state.  So, yes, we DID get hit with that.

In 2001, we purchased our behemoth fulltime unit from a friend in Florida.  We went there, picked it up, and drove it back with the original South Dakota tag on it.  We had gone to the DMV in Florida to ask the procedure, and they told us to just drive it home and deal with our own state.  Happily, Arizona does not levy a state sales tax on private party sales, so . . . WHEW!

But on the other side of that coin, Arizona license plates tend to be on the expensive side, so, although legally we paid no sales tax, the license tag that first year was $2508.!!!  But it could have been worse if there had been sales tax, too.  Florida tags are more reasonable, but we didn't live in Florida, so that avenue was not available.

So it pays to look at all factors of an equation before deciding what you should do.

   Virtual hugs,

   Judie  <-- Sierra Vista, Arizona
   Adventures of Dorrie Anne | Photographing the West

   Today:  How Do I Love Thee, Almond Milk
   ******************************************
 
Re: Non California resident buying a used vehicle in California.
Reply #7 –


But on the other side of that coin, Arizona license plates tend to be on the expensive side, so, although legally we paid no sales tax, the license tag that first year was $2508.!!!  But it could have been worse if there had been sales tax, too.  Florida tags are more reasonable, but we didn't live in Florida, so that avenue was not available.

So it pays to look at all factors of an equation before deciding what you should do.

   Virtual hugs,

   Judie  <-- Sierra Vista, Arizona
   Adventures of Dorrie Anne | Photographing the West

   Today:  How Do I Love Thee, Almond Milk
   ******************************************
 

      My state is one with no sales tax, but there is a 4.25% document fee. Still quite reasonable when compared to other places.

   
Re: Non California resident buying a used vehicle in California.
Reply #8 –
Not that I am recommending this, but though the buyer is responsible for paying sales tax, the seller must report it and supply it to the state. Deals often involve reporting a lower price than the actual cash exchanged, particularly with pp transfers, where the cashflow may not appear anywhere. This practice is riskier for the seller than the buyer.

Steve
2004 FL
2013 Honda Fit
Re: Non California resident buying a used vehicle in California.
Reply #9 –
My experiences in CA, decades ago, with buying a car from a private party in CA was that we owed taxes when we did the title/registration (in that state).  In AZ at that time, no sales taxes were due if the vehicle was bought from a private party (no matter which state).

Of note:  Make sure you get a temporary registration tag so you can legally get the vehicle home.  The dealer will often do this for you or for private party sales you can do this yourself (often online).  Check that it is valid for each state where you will drive the car. AZ has several of these for different purposes (3 day, 90 day, etc.).

We looked into buying a vehicle from CA recently to be titled/registered in AZ and also have had experiences in other states.

Traditionally, with every state we have lived in,  you are taxed at the rate where the vehicle was taken ownership of by the new owner.  When the dealer does the registration and title they use that same location.  Dealers often will not pay registration and title if you are not taking ownership in the same state the dealer is located, but they can and you may save money by doing that (more on that later).

Costs for taxes, registration, title, etc. can vary location to location.  Each State/County/City can charge taxes/fees.  This amount can vary depending the address you are using on your title (e.g. lower taxes if you take ownership / register the car a few miles away in another city/county).   Make sure you include County and City taxes/fees - Phoenix area of AZ recently added an additional roughly 2% sales tax for vehicles if your address is in certain cities.  Dealer vs private party sale can vary in different states.

If it is more advantageous (you will pay less) for a different location from the dealer, there are various ways to take ownership at that different location.  
What the dealer is willing to do depends totally on the dealer. 
 In our recent vehicle purchasing experiences, a CA dealer was adamant he would charge CA taxes with the only exception being if they loaded the vehicle on a trailer (nope, I don't think they would consider your trailer, but meant one of those huge car cargo trailers).  If we had bought this car we might have been able to push and the dealer might have accepted any professional driver or they might not have.
Another car we bought in CO offered to drive the car into the county we lived in so we would be charged less taxes.
One dealer recently was advertising they would deliver the car up to 500 miles away "free of charge", I though that was very generous.  Make sure you research things to see what is possible, dealers typically only tell you "what they do" (e.g.  their common practice) when you typically have more choices if you push back and ask for something different.  Also, check who is liable if there is any damage done along the way (e.g. the drivers company, you, or the dealer).

Taxes:  Many states have a reciprocation policy, e.g. you pay taxes at the dealer for their location and you only owe any higher amount that your state charges (e.g. buy where sales tax is lower, take ownership where sales tax is higher).  But again check as not all states do this.  You need to know the cost of taking ownership away from the dealers state to weigh which choice is worth the money/bother you save.

Depending on how you set up the sale (where ownership is taken) and what the specific dealer is willing to do, dealers can also pay for the title, registration, and taxes or you can do that yourself.
NOTE: If you are buying out of state and you are financing the vehicle (or using something specific you want all the funds taken out of such as an equity loan, retirement fund, etc.), you want the dealer to include the title, registration, taxes, etc. as part of the purchase price so that your financing covers it.  Example, if you live in AZ and buy from a dealer in CA and the dealer works with you so you take ownership in AZ, you need to ask the dealer to include the title, registration, and taxes that will be due in AZ in the purchase price of the car (so they are covered by your financing method). 
Here in AZ, it is common for a vehicle to be delivered and when the person goes to the Department of Motor Vehicle (DMV) and has no proof that taxes were paid to the dealer and they find they owe thousands of dollars to title/register the vehicle and they didn't have that cash lying around.  Instead, the total costs can be included in the purchase price and then the dealer writes a check to the DMV that covers the taxes, registration, etc.  which you hand carry to the DMV (or sometimes the dealer will mail it to them directly).  Again some dealers will say no to this, but use it as part of your negotiation to get them to do it.  Amazing what someone is adamant about not doing until you say I need this or the deal is off and all of a sudden they are very willing to do as you request (assuming you are only asking for legal things to be done).

While again it would depend on the specific dealer, you may be able to include after purchase costs you are adding on right away (e.g. levelers, solar, driving school, etc. etc.) by using the same technique (included in cost of vehicle purchase, a check is written directly to that company for the services/products). 

Jane
Jane & Scott
Currently have a 1989 TK  LD we did a lot of upgrades on.
Bigfoot 25RQ Twin on order with early summer 2024 ETA

Our smartphone autocorrects into very poor English.
 We disclaim the illusion of ignorance this creates as we have enough ignorance we rightly claim.
Re: Non California resident buying a used vehicle in California.
Reply #10 –
A comment on Steve's post.  Sales tax in AZ covers only the price you actually pay for the vehicle, less any trade in, promotions, etc.  I don't know if that is true for other states (since I have rarely traded in a vehicle).  It really skews things so there is more incentive to do a trade in of your old vehicle versus sell it private party (e.g. sales tax you save covers the higher price you would get at a private sell) - hmm makes it obvious who got that law passed.

In AZ and CO back when, it is up to the buyer to state the sales price of the car, but a "bill of sale" (hand written is fine stating vin, sales price, and both parties) is asked for when title/registration is done.  Yes there are exceptions if you don't have one (it used to be you just stated what you bought it for, I am not sure these days).  The seller in all states is highly encouraged to record they sold the vehicle so they are absolved of any tickets/crimes involving the vehicle but that document in my experience didn't ask anything about the buyer or the sales details (price, when, where, etc.).

Again, check your local situation.
Jane
Jane & Scott
Currently have a 1989 TK  LD we did a lot of upgrades on.
Bigfoot 25RQ Twin on order with early summer 2024 ETA

Our smartphone autocorrects into very poor English.
 We disclaim the illusion of ignorance this creates as we have enough ignorance we rightly claim.