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CA sales/use tax for out-of-state purchase...

Discussion in 'Prime Main Forum (2017-2022)' started by Spector, Jan 11, 2019.

  1. Spector

    Spector Junior Member

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    This is mainly for California residents who bought their Prime out-of-state and tried to register it in CA... but also for those who bought their Prime out-of-state and registered it in their home state that can relate.

    So, I bought my Prius Prime in October 2017 in Alaska. I was an Alaska resident for decades, worked there my whole life, have an AK driver's license and registered my car there. At the time I had no plans to move.

    Come September 2018 (after 11 months) I decided to move to California. I am still looking for work here, but technically claimed residency in CA in September since I live here now. CA DMV says I have to register my car in California and doesn't care that its been registered in Alaska and valid until end of 2019! (money wasted having it registered in AK)

    The tax law says I would be exempt if I had moved here after 12 months, so I should have waited 1 more month before I moved, but again I didn't know this tax law existed and didn't plan for this before moving.

    I have read many posts of people who purchased their primes out-of-state and drove it back to California. So, were you guys able to avoid paying the sale/use tax once you brought it back to CA (or your home state)? did you have it registered in the state where you bought it and would that make it exempt from paying the sales tax?

    I am really frustrated with this CA law where I have to pay sales/use tax to CA for a car I bought in AK, used majority of it while in AK, and is registered in AK where I paid my registration fees.

    Does my circumstance qualify for an exemption?

    I read the tax law on CA DMV site, I didn't see anything that said I would be exempt, so that bummed me out. I am hoping someone here found a loophole for the rule? any advice would be greatly appreciated.

    This tax blind sighted me. I am being taxed $1600 for my car to a state I have lived in only 3 months, I can't afford that. Its made me regret moving here in search of a better opportunity and frankly regret buying a new Prime that I actually love.
     
    #1 Spector, Jan 11, 2019
  2. MikeDee

    MikeDee Senior Member

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    Have you registered your car yet? If not, just wait for another month and then register and get your new drivers license.
     
    #2 MikeDee, Jan 11, 2019
  3. JC91006

    JC91006 Senior Member

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    There is no tax, you are not buying a car and bringing it into California. You are simply getting the car registered in California from out of state.

    If I were you, I would just drive the car with Alaska plates until the registration expires and then register it in California. If anybody asks, tell them you came to California 7 days ago
     
    #3 JC91006, Jan 11, 2019
  4. Leadfoot J. McCoalroller

    Leadfoot J. McCoalroller Senior Member

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    What's the odometer reading? Last time I checked, California law holds that a car is "new" until it has 7500 miles on it, and I think that broad definition of "new" is the legal basis for the tax they want to charge you.
     
    #4 Leadfoot J. McCoalroller, Jan 11, 2019
  5. JC91006

    JC91006 Senior Member

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    If the car is not a "new" car and it's registered in your name in another state, there is no use tax when you bring it into CA. The use tax would only apply if the car is not in your name and you bring it into CA, it's then treated as a "sale" and taxed.

    If the car is registered in another state in "your name" and you want to register the car in CA in "your name", there is just the registration fee (and possibly a smog certificate) required.

    Best way to do this is be a member of AAA and you can do the entire transaction there.
     
    #5 JC91006, Jan 11, 2019
  6. PT Guy

    PT Guy Senior Member

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    "a vehicle or vessel purchased outside of California, first functionally used outside of California, and brought into California within 12 months from the date of its purchase is also presumed to have been purchased for use in California and subject to tax if any of the following conditions occur:
    --Purchased by a California resident as defined in section 516 of the California Vehicle Code1, or
    --In the case of a vehicle, subject to California vehicle registration during the first 12 months of ownership,"
    http://www.boe.ca.gov/pdf/pub52.pdf

    So...there is usually a period of time before when a vehicle must be registered in the new state. California gives you only 20 days after you become a resident. Stretch that time out so you register 12 months plus 1 day after the date of purchase.
    How to Register a Car in California | DMV Fees, Application
     
    #6 PT Guy, Jan 11, 2019
    Leadfoot J. McCoalroller likes this.
  7. JC91006

    JC91006 Senior Member

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    I don't see how California can double tax you. If you paid a sales tax in another state, they cannot charge you sales tax again. This might only apply if you never paid the sales tax in another state (like it's never registered in your name in another state).

    In the OPs situation, he's well over the 12 month period, there won't be any tax
     
    #7 JC91006, Jan 11, 2019
  8. Spector

    Spector Junior Member

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    It was at 8000 when I drove it down, now reads 9000+. I filled out their DMV paperwork and gave the exact odometer reading of over 9000, I don't think that had an effect on the rule. I think they consider it still new if its within 12 month of purchase.

    Its a new car registered under my name in Alaska. Still California DMV does not care, they said I still have to pay sales tax for it and have it registered here in CA. None of my Alaska paperwork is being considered.

    CA DMV said they will credit the tax I paid in AK and I still have to pay the difference. There is no tax cap either, they are basically charging me 9.74% tax of the original purchase price... which is insane!

    The city I lived in AK where I bought the car had a 5% tax, but they still had a cap on taxes so I never had to pay the full 5%, just $600 cap. California is amendment on taxing the full 9.74% because the city also has an extra tax added on.

    Also I am not over the 12 month period. I moved to CA after 11 months of the car being purchased, so that is why I am in this predicament. If I had moved here in November everything would be fine. The unfortunate thing is I actually filled out my paperwork for the DMV being honest with my arrival and purchase dates and now I am getting fucked. I should have just said I arrived in November on my paperwork. This is what I get for being honest.
     
    #8 Spector, Jan 11, 2019
  9. JC91006

    JC91006 Senior Member

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    If you haven't completed your paperwork process and haven't paid any fees, just start over. If you want to be less honest now and if they ask, tell them you went back to Alaska and just came back now to reside permanently. Tell them you didn't have the tax money so you stayed in Alaska until the 12 month has past and now you're back

    If you don't like taxes, you're really going to hate CA
     
    #9 JC91006, Jan 11, 2019
    Last edited: Jan 11, 2019
  10. MikeDee

    MikeDee Senior Member

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    And the cost of housing, utilities, gasoline...

    I wonder if he can qualify for the state and utility rebates and carpool lane stickers?
     
    #10 MikeDee, Jan 11, 2019
    Last edited: Jan 11, 2019
  11. Leadfoot J. McCoalroller

    Leadfoot J. McCoalroller Senior Member

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    Welcome to the lower 48, now pay up!

    Seriously don't let these cheechackos push you around. Post #9 probably has the best advice I've seen so far.
     
    #11 Leadfoot J. McCoalroller, Jan 11, 2019
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