State of California vehicle title transfer TAX question....
09-23-2006 | 12:45 PM
#17
Pro
Joined: Aug 2002
Posts: 641
Likes: 0
From: Nashville
Originally Posted by CP
This is what the current DMV website says:
"Use Tax: If a vehicle is purchased outside of California and brought into California within 365 days of purchase, use tax is due."
http://www.dmv.ca.gov/pubs/brochures/howto/htvr9.htm
That means if vehicle is kept out for 365 days, no use (same as sales) tax is due.
In 2003/2004, it was 90 days. I still have a copy of that code section in my RUF purchase file. I went to DMV with that print-out, and the clerk said:" that's part of the regulations. I will not collect sales tax now. If Sacramento decides that you should pay, they will bill you." Registered the car and never got a bill.
So I stand corrected. In 2006, it's now 365 days out, and no sales tax due. As I said, it is a little-known fact. I happened to be a state and property tax experts in my CPA days, that's how I learned about it.
CP
"Use Tax: If a vehicle is purchased outside of California and brought into California within 365 days of purchase, use tax is due."
http://www.dmv.ca.gov/pubs/brochures/howto/htvr9.htm
That means if vehicle is kept out for 365 days, no use (same as sales) tax is due.
In 2003/2004, it was 90 days. I still have a copy of that code section in my RUF purchase file. I went to DMV with that print-out, and the clerk said:" that's part of the regulations. I will not collect sales tax now. If Sacramento decides that you should pay, they will bill you." Registered the car and never got a bill.
So I stand corrected. In 2006, it's now 365 days out, and no sales tax due. As I said, it is a little-known fact. I happened to be a state and property tax experts in my CPA days, that's how I learned about it.
CP
09-23-2006 | 01:45 PM
#18
Race Director
Joined: Jun 2003
Posts: 15,121
Likes: 334
From: Los Altos, CA
No doubt the government wants us to pay sales tax. That's not the debate. However, call it loop-holes, call it anything you will. If there are legal ways (not tax evasion moves) to avoid paying tax, the one who knows how will enjoy the benefits.
Witness the millions of tax professionals in this country. If there were no tax loopholes, or exceptions, all the tax lawyers and accountants would be doing something else.
CP
Witness the millions of tax professionals in this country. If there were no tax loopholes, or exceptions, all the tax lawyers and accountants would be doing something else.
CP
09-23-2006 | 07:25 PM
#19
Rennlist Member
Joined: Dec 2001
Posts: 25,152
Likes: 87
Originally Posted by RdRunner
Thanks for the feedback guys, it really opened my eyes...
BrandandC - I'm sorry to hear that, but can you tell me more what else was involved in the audit process? Was the outcome just treated as a paperwork mistake? Was there anything else other than the make up for the tax dollar amount on the car and maybe a fine?
My question is how would CA DMV investigate this if the seller is out of state, and what if the seller is willing to cooporate with your story... ie. getting even with the wife, car was just too much hassle, my father in law.. etc...
I do have a third option but is just too much work, residence in Oregon where I can register the car. But this means I have to take the vehicle up there, and get all the smog and paperwork done, and then perform a self transfer of ownership and all that work again in CA. But this is something I have performed before with new vehicles where the dealer just ships it down here, but used cars are alot more troublesome.
Thanks
-Ryan
BrandandC - I'm sorry to hear that, but can you tell me more what else was involved in the audit process? Was the outcome just treated as a paperwork mistake? Was there anything else other than the make up for the tax dollar amount on the car and maybe a fine?
My question is how would CA DMV investigate this if the seller is out of state, and what if the seller is willing to cooporate with your story... ie. getting even with the wife, car was just too much hassle, my father in law.. etc...
I do have a third option but is just too much work, residence in Oregon where I can register the car. But this means I have to take the vehicle up there, and get all the smog and paperwork done, and then perform a self transfer of ownership and all that work again in CA. But this is something I have performed before with new vehicles where the dealer just ships it down here, but used cars are alot more troublesome.
Thanks
-Ryan
My point is that I recall having to pay the tax because even though I listed it as a GIFT, the VALUE of the gift was to be taxed no matter what. I did not intend to mislead. I paid the tax at the time of registration but I had not expected to because of the gift idea. I may have gotten screwed out the loophole, but until I do a private person purchase again, I will just pay the damn taxes - begrudgingly. And write every living second of my financial day off since I am self employed.
09-26-2006 | 12:36 PM
#20
Thread Starter
Instructor
Joined: Mar 2006
Posts: 132
Likes: 0
From: Bay Area, CA
Originally Posted by CP
This is what the current DMV website says:
"Use Tax: If a vehicle is purchased outside of California and brought into California within 365 days of purchase, use tax is due."
http://www.dmv.ca.gov/pubs/brochures/howto/htvr9.htm
That means if vehicle is kept out for 365 days, no use (same as sales) tax is due.
In 2003/2004, it was 90 days. I still have a copy of that code section in my RUF purchase file. I went to DMV with that print-out, and the clerk said:" that's part of the regulations. I will not collect sales tax now. If Sacramento decides that you should pay, they will bill you." Registered the car and never got a bill.
So I stand corrected. In 2006, it's now 365 days out, and no sales tax due. As I said, it is a little-known fact. I happened to be a state and property tax experts in my CPA days, that's how I learned about it.
CP
"Use Tax: If a vehicle is purchased outside of California and brought into California within 365 days of purchase, use tax is due."
http://www.dmv.ca.gov/pubs/brochures/howto/htvr9.htm
That means if vehicle is kept out for 365 days, no use (same as sales) tax is due.
In 2003/2004, it was 90 days. I still have a copy of that code section in my RUF purchase file. I went to DMV with that print-out, and the clerk said:" that's part of the regulations. I will not collect sales tax now. If Sacramento decides that you should pay, they will bill you." Registered the car and never got a bill.
So I stand corrected. In 2006, it's now 365 days out, and no sales tax due. As I said, it is a little-known fact. I happened to be a state and property tax experts in my CPA days, that's how I learned about it.
CP
Thanks for the tip CP, I'll verify that with my accountant.
So now raises another question, what if I buy the vehicle. And it gets shipped over to my place, and I park it in my garage, "treat her like a garage queen for a year, then get her registered" does that count? [Reason I say that because I been traveling alot or work, and this last year I have put less than 5K miles even in my daily commuter, I have seem to be gone more that 50% of the time]. Last I recall, they don't document vehicle licence plates or VIN IDs when they are being shipped....
"Of course once again, I'm not cheating on my taxes. I'm just trying to fully utilize my resources to aliviate my tax due, and apply he corect deductions" per my Girlfriend and future CPA....
-Ryan
@Tokyo....
09-26-2006 | 04:42 PM
#22
Advanced
Joined: Feb 2005
Posts: 60
Likes: 0
Another entirely different idea is becoming a used car dealer. This way you can buy and sell cars as you please and make a little profit while you are at it. This way you can avoid paying sales tax and have access to auctions. You do need to do a good amount of paperwork, have your own office and have to pay various fees and insurance. If you have your own buisness having an office shouldn't be a problem and the money you made from profits and not paying sales should offset your operating costs. Anybody else have any experience in this area? Just a thought...
Scott
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