Buying out of State

Short answer: Yes, you're screwed.

Long answer: You have to pay CA tax if you take delivery in CA. You can probably ignore this in a private sale, since the seller isn't collecting tax, but a dealer is going to be in hot water if they let it slide and get audited, so they probably won't think about bending the rules. The only way around that is to not take delivery in CA by shipping the car out of state. You may be able to take a credit for some of the CA sales tax to offset your PA tax. You can do that in MA, but the CA percentage is higher, and MA does not offer a refund on the CA "overpayment" (it's just lost). I don't know what PA does.

CA adds county and (sometimes) city sales tax, but I think out-of-staters only pay 7.5% (last line of first table):

County and City Sales Tax Rates

If you can get some of that credited to your PA tax, you may be OK. If not, you may be better off shipping the car home (7.5% of 70K is $5250 - a lot more than cost of shipping a car). You'll need to check with the PA Dept of Revenue and DMV.

If you ship the car home (and take delivery out of state), keep the shipping paperwork as proof. If you ever try to sell the car to someone in CA, they might have problems re-registering in CA if they can't prove that your prior purchase of a CA car from a CA dealer was tax exempt due to out of state shipping (ie, CA may try to hit them up for back taxes, penalties, and interest on your purchase, since they assumed it happened in CA). I've seen MA try to pull this scam.

I bought a 911 from a TX dealer once. I flew in, took a test drive, made the deal, and had them ship it with the company they used (~$1300, I think). Way cheaper than the TX sales tax.

Also, people may make blanket statements like "You pay sales tax where the car is registered" or "You pay sales tax where the car is purchased." They are basing these statements on their experiences in their specific states of purchase/registration, which may not apply to you specific situation. Ignore these blanket statements.

I remembered posting about this once. I dug up a couple of threads that might be helpful.

Sales tax
Mulling idea of factory car pickup (Feb 15)-does that affect Colorado sales tax, etc?
Questions for NJ

Thorough and fantastic answer, tga. All exactly correct. I was in the same situation as Sabr, but in OH instead of PA. Ended up simply shipping the car instead of picking it up and doing a road trip. OH only refunds up to their tax rate (as in tga's MA example above), and that tax difference between OH and CA meant I could give the car a cushy enclosed ride to OH for "free."

At the time I got an absolute pile of horrible advice about only paying tax where the car is registered.

When stationed in San Diego, we purchased a new Volvo. The dealer salesman and I drove just over the state line - I drove one of the service cars and he drove our new Volvo. We stopped at a stop just over the line - signed the papers as I was going to have the car registered in another state, switched cars, then drove back to San Diego. Thus, I did not have to pay the California Sales Tax. You may ask if they can do this.

What state line did you cross? The Mexican border?

I'd love to take delivery of a Model S at the factory, but this tax thing just seems to make it very unreasonable. Driving to Tahoe to take delivery might be an option, but even that seems like a lot of work (and I can't see Tesla making a DS available for all day just to accomplish that).

rogbmw said:

When stationed in San Diego, we purchased a new Volvo. The dealer salesman and I drove just over the state line - I drove one of the service cars and he drove our new Volvo. We stopped at a stop just over the line - signed the papers as I was going to have the car registered in another state, switched cars, then drove back to San Diego. Thus, I did not have to pay the California Sales Tax. You may ask if they can do this.

Click to expand...