Sales tax or no sales tax, that is the question.

It'll only work as long as you never register the car in CA.

You'll have to pay a "use tax" when you register it at DMV, which will be equal to the sales tax you would have paid had you purchased the car in California.

From http://www.dmv.ca.gov/vr/osreg.htm#BM2561

"Existing law imposes a use tax on a vehicle purchased outside of California and brought into California within 90 days of purchase. New legislation effective October 1, 2004 through July 1, 2006 requires payment of use tax on a vehicle purchased outside California and brought into California with 365 days of the purchase date."

Also, you can't bring a car that only meets 45-state emission standards into California if it has less than 7500 miles on it, except under special circumstances. This doesn't apply to the Prius, but it is the reason you can't buy a new VW diesel in a state that sells them and bring it into CA.

 

What you need to know.
http://www.arb.ca.gov/msprog/NonCAVeh/NonCAVeh.pdf

All you possibly would ask.
http://www.dmv.ca.gov/vr/newvehicle.htm

Basically, you can't buy a new vehicle from out of state and register it in CA to avoid sales tax. (some exceptions apply). A new vehicle is one with less than 7500 miles (it does not matter if it has been registered in other state of not).

 

A former Californain, I remeber a couple who bought an expensive motor home in Oregon to save the sales tax. A neighbor turned them in. It cost not only the tax, but also a hefty fine.

Up here in Washington State, there's a lot of temptation to head south and buy a tax free car. They gotch... you have to register a car in this state within 30 days of bringing it in and they collect the equivalent tax when you do it. A car that was previously registered in another state is exempt, as long as you can prove you paid the sales tax on it.

 

Up here in Washington there is a special unit that looks for folks that are doing what you are thinking about. I would not mess with the Governornator. He does not strike me as Mr. Nice Guy or is that just his stage persona? What ever bureaucrats have their sense of humor excised before they are accepted to the system. I would not go there.

 

I thought about doing the same thing and then decided that it was just not worth it. So, in lieu of getting a break on the sales tax I looked for the best "deal" that I could find for my car. I wound up getting it from Claremont Toyota as they offer lifetime free oil changes for the car.

Also, you may be able to save yourself a bit by getting your financing inplace prior to going shopping for your car. Credit Unions can be a real boon here. The one that my hubby used to handle the financing for our car offers a buying service that does the shopping for you and also gives you a 3 month payment deferment if their buying service finds the car for you first.

As it happened, I was impatient so I found my car before they did but we still got 2 months of deferred payment and a lower interest rate than the dealer's were offering. All in all, a good deal I think.

Don't forget that if you purchase this car before the end of this year you do get to take the $2000 tax adjustment for your intelligent choice. That should help some. Oh, and in the city of Los Angeles until the end of May (I believe) you get free parking at any parking meter so it just gets better and better!

Also, re: Claremont Toyota, they seem to have a pretty consistent supply of BC's in a variety of colors at MSRP. I dealt with Dave in Fleet/Internet Sales and Abe aka Fadi the regular floor salesman and both were great. If you go to see them tell them that Tisza say's hi!

BTW, I don't have any connection to this dealership, but they were nice and easy to deal with and bent over backwards to make my Prius dream come true.

Take care,

Tisza

 

When you buy a vehicle you pay sale tax in the statedrivers license is issued... example you live in Maryland but buy in Delaware.. you would a maryland sale tax.. .. thanks stefcat:rockon:

 

I bought a vehicle outside of California once. But when you register it here in California the DMV will calculate California sales tax based on the purchase price from your sales receipt. There is no way around it. If the state you purchased the vehicle from collected the sales tax for California then you won't have to pay it here.

 

Don't forget that you can take the sales tax on a car purchase as a deduction this year, so you've got that going for you...

 

Let me add a slight caveat to that, though: ONLY if you DON'T take a federal deduction for your CA income taxes withheld! Seems you get one or the other, not both any more. It makes sense to calculate which is the better deal for you.

Also, if AMT kicks in for you, you may be out of luck that way, too.

Disclaimer: I'm am not an enrolled agent or any kind of tax expert. I'm going on what my tax guy told me, and it's perhaps garbled by my failing memory.