I am looking at buying a car in California, but I live in Texas. I spoke with the dealership and they said that I would have to pay California taxes since it is in CA. My question is would I have to pay taxes in both states? That doesn't make since to me. Thank you for your help.

 

I live in SC and bought a car in GA. The dealer there had a form that showed I was from out of state, so they did not tax me.

 

Generally you can get a transport tag and drive it home. The dealer needs to prove it was taken out of state to avoid the sales tax and the transport tag would prove that

 

I suggest you call the Calif DMV http://www.dmv.ca.gov/

It is a potentially confusing issue, and you are probably best off getting the straight story.

If you were buying from a private party, they do not collect any taxes or fees, and would sign over the title to you (plates stay on the car) and you could simply drive the car to Texas.

A dealer is a different story. If you were a student or military, you could register it in your home state, but I think the dealer would still have to charge sales tax unless they were shipping the car out of state. That may be the only alternative, and the dealer might or might not work with you on that.

Good luck.

 

That sounds right to me.

Half correct, you don't pay any taxes or fees to a private party but you certainly can't legally drive 1 block without having registered the car with a temporary tag from CA or your home state. You can't legally use the plates on the car, they have to be turned into the CA
DMV. I'm sure many people have kept the plates on the car in order to
save time and a little bit of money but I would not want to be explaining this to a cop after he stopped my vette on the drive home,
even with a bill of sale and title in hand.

 

This will not work in California. You can not get a transport tag even for a private party sale. It is very tricky. If you drive the car 1 mile after taking delivery then you are screwed.

If private party and you pay cash and get the paper title you still can not legally drive it home without being liable for the tax.

If the guy has a payout and you need to pay off the bank then the DMV will not release title until taxes are paid.

Now chances are you won't get caught UNLESS you get pulled over a ticketed for anything then your screwed.

See below

Living in Vegas I have bought several cars in Cali so I've become very eduacated on the sales tax workings in Cali.

If you take delivery in California you will have to pay California Sales Tax.

You will not have to pay again in Texas.

The key word here is "Delivery" if the car is being shipped to Texas then you not have to pay Cali tax.

Now this is how you get around the Cali sale tax for out of state purchase.

Simple! Have the car delivered to you out of state.

Have the seller PAY someone to deliver it to you and document it. To be safe person doing the delivery should not be related.

It could for example be your buddy riding home with you deliver it to you when you cross the Cali state line.

The third party (your buddy for example) simply writes an invoice to the seller for delivery charge say for $50. Make sure the seller pays him with a check (paper trail)

In the past I had a vacation home in Arizona and registered some of my vehicles there. The dealer I bought from would pay me to deliver to myself. Cali now disallows this type of delivery.

If you have to pay sales or use tax in your own state then it's probably not a big deal to just pay it in Cali and show them in your home state it was paid.

Here in Nevada we do not have to pay sales tax on used cars Private Party sale so it makes a difference of $1000s.

 

I would also check with your home state of Texas DMV to see what the tax requirements are when you purchase a vehicle out of state for registration in state. There are reciprocal tax credit agreements between certain states that allow sales tax paid to a different state. I would confirm your tax obligations and only pay the sales tax to the entitled state. Sales Tax Reguations on motor vehicle transactions differ greatly from state to state. Also, some states allow dealers to charge a flat state fee to cover their cost of doing state paperwork. I purchased a Vette in Virginia and had to pay a $400 fee, even though I resided in PA. They charge this fee on all vehicle sales, what a ripoff!!!

 

No - you are not correct. We are talking about California not New Jersey, which has different procedures. I am somewhat familiar with the New Jersey procedures, where the tags are supposed to come off the car. In California they stay with the car, and having a signed title from the previous owner is ok for a short period of time.

Also - what Vega$Vette is telling you sounds 100% correct.

 

I lot of mis information going on here. I used to own a car business here so I do have some actually experience with CA DMV.


If you buy the car from the dealer and take delivery in California you must pay sales tax. The only way around it is if you have it shipped and the dealer get's a bill of lading from a shipping company. Many dealer don't want to deal with this because it is a big red flag with the tax board.

If you purchase from a private party and the car is registered plates and tags stay on the car, chances are unless you do something dumb your not going to get pulled over. But even if you do the last thing the police is worried about if you paid sales tax or not. Generally people fudge on what they pay for the car but the DMV only collects from the new owner. If you register your car in another state all they are worried about is release of liability.

 

John, Sorry, I defer to you on the California regulations. I was referring
to my NJ/PA purchase. Did not realize that there's so much variations between states. You're right, the OP should check with his local DMV
and CA DMV. FIY, you can't even do an out of state transaction at
the Harrisburg DMV, capital city of PA. You have to go to an outside
agency, ie AAA, to get a PA temp tag back to Jersey. Very confusing
to say the least.

Jerry

 

I believe where you register the car is where you will pay the tax

 

This is how it works in NY and CT. CA....

 

California will do anything they can to make you pay sales tax. Even Private Party.

My kids GF bought a Stang last year. Gave the $ to the seller and drove the car home to Vegas.

The Bank had the title and as you know Cali does "paperless" titles.

The seller paid off the loan and the DMV would not give his GF a paper title until she paid Calif. Sales tax because she took delivery and drove the car in Cali.

btw. I played a little game on the phone with the DMV and said the seller drove the car to Vegas. They said to get a Notorized letter from the seller and NO sales tax. We did not do this as we did not want the seller to lie.

The Dealer does not have to use a "delivery company" They could have an employee deliver the car out of state or hire a driver to do it.

It has to be documented.

If you pay cash and get a paper title from the seller then you will probably not have a problem driving it home with the Cali Plates on the car. Better yet if your state has a temp tag get one before you pick up the car. A guy picked up a TT Stang we sold and Florida had given him a temp tag before he picked up the car. He needed proof of insurance and the VIN#

The most important thing is to have your proof of insurance with you for that Vehicle VIN#

 

Those are AZ rules! When I was a dealer it was very clear. NO BILL OF LADING and the selling dealer is responsible for sales tax on the transaction. If a dealer is audited by the Franchise tax board and they don't have that document the dealer will have to cough up the money for that transaction. Two of my dealer friends had it happen to them.

That Private Party payoff thing with a bank is a totally different scenario. If I was a out of state buyer I wouldn't even mess with a bank that didn't have the title for the vehicle. Honestly I avoid stuff like that at all cost's.

 

Not a problem at all, Jerry. The thread is just indicative of how members are anxious to help. The various state laws are extremely inconsistent.
John

 

Even this might be open to question. The auto insurance policies I am familiar with will automatically cover a new/used car purchased - and the cars have to be on the policy within a stated period of time. I assume most police are familiar with that. If you have a title from the previous owner signed over to you within the past few days or a new registration and can show proof of insurance on another car, you ought to be ok.

I am not positive about this, but seems reasonable.

 

98tevasvette. Get vin. no. Go to the county registration dept, with proof of insurance, and 20.00. They will give you a temp. card good for 30 days were you can drive that car anywere in the country. Pay california tax, It will be transfered to Texas. Be shure to have proof that the tax was paid. BIG Problem- be shure that the car is not floored, In other words the dealer does not have title to the car. Either the auction house or the loan co. that floors these cars has the title. If the dealer failes to pay them. Your up the creek trying to get title. I know, been there. Took me one year trying to get the title from this dealer that went bankrupt. Lot of nice vettes for sale here in Texas, less hassel.

 

I've bought several cars from out of state and either gotten a temp tag for transport, or "other" we'll say. You just pay your state's tax or whatever when you do your title and registration.

 

However having the proof for that VIN# in your possession goes a long way with LEOs


Interesting side note here in Vegas. My wife bought a Lexus and the dealer as a courtesy did the DMV registration. When the dealers do it all they needed was a "promise to insure document"

Dealer registered a couple of days before I called my insurer with the new vehicle info.

DMV sent wife a letter that she failed to maintain insurance on her car and fined her $250. The insurance company said although she was covered for collisions etc. She was NOT covered for DMV purposes and they refused to give her a document stating she was covered.

DMV says "we know she was covered but unless we get a document the fine stands" I got pissed and called 2 other companies that confirmed their "courtesy coverage" also did not apply for DMV purposes.

Just to be safe I'd call and add the car to my policy before I picked it up. Don't want to give them any excuse to deny a claim if something did happen.

 

In most states.

However Cali says you take delivery in Cali and you owe the tax period. And whatever tax you paid would be credited to you state's tax's through reciprocal agreement which is no big deal unless yoy live in a state like Oregon or Nevada that does not tax used vehicle sale for private party transaction.

Another thing they try to do is tell you if you take out of state delivery you can not drive it in Cali for 90 days.

Don't know how they could prove it but that's what they told me.

The main reason Cali does ths s**t is that a lot of people we buying cars, boats, RVs etc and titling in Oregon a state that has NO sale tax and vehicle registration is like $35 per year then use them in Cali.

So... they have been very aggressive in this area.