California bill to exempt out of state Tesla buyers from state tax

Does that mean another tax break for the rich?

 

You might still have to pay your local state sales tax. I live in CA and no matter what state I purchase a car, even if its in CA, (Taxes are different between counties) I still pay the sales tax for the home zip code I register the car to.

It sounds like CA was getting some of the tax from out of state buyers, those with no tax or less than 7.5%. Pretty sneaky in my opinion. Now they are removing it to spur Tesla sales which has its sole plant in CA. Makes sense.

Sorry Texas residents, you'll still have to pay taxes.

 

I think it says you still have to pay your state sales tax. Just removes the barrier for folks to buy in CA. our sales tax is 4% on cars so no one would go to CA. In Va. we get our big tax money on the local annual car tax, so the state keeps its take on the low side.

 

No.

We would have done this, if we didn't have to pay state tax twice.
If this goes through, we may also pick up our Model 3 this way.

I strongly suspect CA lost more economic stimulus (from out of state folks spending money at hotels, restaurants, etc) than they did from the double state tax fee.

 

"Today, out-of-state Tesla buyers who take delivery within California must pay the state's 7.5-percent sales tax on the car.

When owners re-register the cars in the states they live in, they also pay any increase in the sales tax due if their home-state rate is higher. (No refund is given if home-state rates are lower.)"

Someone explain this to me. If I go to CA physically to buy a Prius from Lady DI, do I pay CA sales tax...then again in TX where it will be registered...but not if I buy a Tesla if this change happens?

 

Good question...Lady Di could probably tell you best approach. It probably depends on each state. I know Louisiana used to charge sales tax on all your vehicles when you moved into the state, even if you already had paid in the other state.

 

No, my understanding is if you go get your car in CA you pay for the sales tax there, and again at your home.
Lady DI could give more definitive info.

It may also be an issue where this only affects Teslas due to them being sold directly from the manufacturer?

In either case, this is not an extra bonus to Tesla buyers, it is good for everyone, or at least stops penalizing the Tesla buyers.

 

Living in state tax free NH,
California, if I were to buy a car there wouldn't charge me sales tax, my state would, or in this states case wouldn't, if cailfornia is attracting buyers be stating the obvious, so be it.
If I bought a 5,000$ shovel in Ca, I would be charged sales tax, if I had it shipped to NH, I wouldn't pay Ca. Sales tax, I would pay NH sales tax, 0.

 

Doing some digging on this. In addition to CA taxes, if you take delivery at the factory you also have to pay local taxes (county).
Whether or not that is refunded, depends on the state laws of where you reside.
I'm hoping the CA law change would also exclude the local sales tax.

 

in mass, you pay sales tax when you register the vehicle. if you owned it in another state and paid the sales tax there, then you're exempt when you register it here.

 

that's not the most accurate tax law. Cali requires cars purchased out of state to be taxable UNLESS, they've been registered & owned for over 180 days in another state of domicile. So, when we purchased our hybrid lexus from PA, and registered it to our MT address - rather than Cali ... not hard to figure how long it was - prior to us bringing it down south to register ... if you know what i mean. The prior registration 'wait' period used to be only 90 days. Ah ... for the good ol' days.

There you go ... hammer someone wanting nice transportation who may make as little as 40k/yr + net (one of the Tesla tech's we know for example ... who makes payments on his Model X) ... or maybe someone shuttling around their business customers (net per/yr $50K) wanting to look like they're successful enough to NOT have to just buy a Nissan Altima or F150 or whatever. Great ... don't hammer the oil industry while YEARLY - they pay NO corporate income tax due to write off's dividends etc. That's a great way to bring in more fed tax and increase plugin's - I suppose.
On this perfect taxation scenerio - do you intend to tax purchasers of monster duallies? They get nice tax breaks too, when used for businesses ... just as purchasers of the nasty looking Mira receive as well. This reform ... it'll be great, I'm sure.
.

 

This was a legitimate question....followed by a legitimate question. I only know Texas, Arkansas and Louisiana as it applies. In those states, if you buy a vehicle in one and register it in one of the others, you only pay sales tax in the state you live/register in. If, on the other hand, CA charges sales tax for "all vehicles" at point of purchase and you once again have to pay where you live/register within the grace period...that's wrong. If this is not the case, then fine. If other vehicles don't get double taxed...but Tesla does...then I have no problem with the new law. Please don't turn an inquiry into a fight against big oil and 4X4s. Let's be clear though, Tesla at present is a rich person car...and there is nothing wrong with having money either.

 

Sales tax is not collected on out of state purchasers of any passenger vehicle. Purchasers need to remove the vehicle within 30 days and buy a temp tag. Those sales don't qualify for state incentives.

The bill comes with an expiration date.

 

Don't think for a half second that big oil is applauding EV's and/or that they're happy for plugin alternatives - that's a fools paradise;
The Kochs Are Plotting A Multimillion-Dollar Assault On Electric Vehicles

There's a bit of irony when long range EV's and other plugin's become the concern, because "they're rich-man's toy's". It IS a oil lobby mantra - regarless of whether recognized it or not. There is a war that goes on behind the scenes - and it's for subsidy dollars. So yea, the oil lobby wants their product nice & cheep. Too many plugins flies in the face of that goal. More use of their product keeps inventories low. Why do you think the oil lobby has no problem with fuel cell cars ... it's because they run on natural gas - and potentially keeps the oil products flowing.
.

 

It's amazing how fast things get politically charged these days, huh?

FWIW, in most parts of the country, you don't pay sales taxes on vehicles that are registered in another state. This is because cars are fairly big business, and despite the fact that car retailers are complete jerks (at times....they actually try to inhibit some interstate car transactions!) they like to be able to sell cars to folks in neighboring states.
Many car markets straddle two or more states....and not just in the itty-bitty county-sized states in the Northeast.
Example: Memphis. St. Louis etc...
Imagine if you will.....getting yoked for sales tax in one state and then having to do it again when you take your car home.

I'm not surprised that all of this would be different in California.

Tesla is a manufacturer (big business) in Caly...so I don't really have a problem with the state government making laws to benefit them since it will ultimately benefit their state, and incentivize other states to do things to attract large scale manufacturing in their respective states.

See also: Trickle down.

 

One other aspect of this may be that Tesla, I am guessing, has a much higher percentage of buyers willing, if not wanting, to come to California to pick up their car.
Frankly, I think it is stupid, for any state, to charge sales tax for a car if it is being registered in another state.
The law should just eliminate that double taxation, period.
They will put more useful money into the economy than they loose in sales tax.