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Avoiding out of state California used car sales tax??

Discussion in 'Fred's House of Pancakes' started by koa, May 11, 2009.

  1. koa

    koa Active Member

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    For any of you who live in California I have a question. I was thinking of buying a used vehicle (Prius w/over 7500 miles) for my daughter who is still my dependent and attending college as a non resident in California. The car would be purchased outside the state of California and then registered in her name in California. I would like to legally avoid the 9.25% sales/user tax Los Angeles would charge. Hawaii has no sales tax on used vehicles between private owners so this was quite a surprise to me. Apparently the only way I found to avoid this tax is if I send her a vehicle which has been registered to me at least a year. Since I don't have a spare vehicle this is not an option. Any suggestions?
     
    #1 koa, May 11, 2009
  2. Martin37

    Martin37 New Member

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    I believe the only way to avoid Cal sales tax is to have the vehicle registered & licensed to you in Hawaii. Not sure of the "at least a year" rule; what would it cost you to have a car shipped from there to Cal? I have purchased several vehicles in Cal but since I live in Oregon w/o sales tax, I have to have the rig driven out of state before I take posession of it.
     
    #2 Martin37, May 11, 2009
  3. koa

    koa Active Member

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    Thanks. You're correct, it turns out as a resident of Hawaii I can actually register a car in Hawaii that's not physically here, so a car I purchase outside the state of California can be brought to California and have Hawaii license plates as long as my daughter is a student in California. I just need to find out if there's any tax liabilities in the state where I'm buying the car.

    It costs about $1000. to ship a car from Hawaii to Los Angeles.
     
    #3 koa, May 11, 2009
  4. Patrick Wong

    Patrick Wong DIY Enthusiast

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    As you say that your daughter is not a California resident, then she should be able to drive a vehicle with valid registration from her home state (presumably Hawaii.)

    If your daughter is a California resident then she would have to obtain CA vehicle registration. See:
    California DMV HTVR9 - How To Register A Nonresident Vehicle

    "When fees are due
    Commercial vehicles and any vehicle owned by a California resident must be registered upon entry into California unless a special permit was obtained. Visitors whose vehicles are properly registered to them in their home state may operate their vehicles in California until they:
    • Accept gainful employment in California.
    • Claim a homeowner's exemption in California.
    • Rent or lease a residence in California.
    • Intend to live or be located here on a permanent basis (for example, acquire a California driver license, acquire other licenses not ordinarily extended to a nonresident, registered to vote).
    • Enroll in an institution of higher learning as a California resident or enroll their dependents in school (K-12).
    Fees must be paid within 20 days of entry or residency to avoid penalties."
     
    #4 Patrick Wong, May 13, 2009
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