RdRunner

Alright,

Tax in California is about 8.25%, so ballpark for a $70,000 used 996 TT I'm looking to pay close to $6,000 to the state of California. (In which I wouldn't mind if they stop issuing me speeding tickets, or if I could get away with just paying for the court fines, and not affect my record But that is another topic)

But $6,000, if you look at it is a pretty good number for bolt on parts, suspension, ECU, tires etc...

By the way I'm trying to be as politically correct as I can on this topic...

Now by purchasing a car from a dealer (out os state, or locally) They report the sale value directly to the DMV. But by purchasing a vehicle from a private party, this become a little "loop whole". Where private party could "misinform" the DMV on the vehicle sale price where the buying party would maybe benefit from this mistake, by paying less taxation Now in some cases the seller could even claim the car to be sold at a lower price than market value, $20K $15K or even as a "gift"

The question I have is, how would the State of California audit or monitor these transactions, and what are the liabilities behind it. I did check with my CPA, and she is a bit unsure, since most of the taxation we have are done at the federal level and not state...

Thanks for the feedback !!!

-Ryan

shane.emc

This is what "A friend of mine did". If you buy from a private party have them just sign the pink slip over to you and leave the rest blank. Now you can say the car was a family transfer from your "Stepfather" who will have a different last name than you of course. And Yes stepfathers are considered family transfers. Now you don't pay any tax or have to get the car smoged. You don't have to show proof that the person signing the car over to you is your stepfather!!!

If you don't have a AAA membership get one. This way you can go to the AAA and be done with all this within 10 minutes. You can get the membership and use it the same day.

The person you are buying the car from should have no problem signing over the pink slip and leaving the rest blank. These cars are hard to sell and nobody is going to pass up a sale for this reason alone.

This was done in California.

If you are buying from a woman then you can use "Stepmother" instead.

You gotta love the loopholes in the system.

ZSA Motorsport

you can book a room in the county jail. tax evasion, or worse, in this case, fraud, probably carries major penalties.
trust me, we all hate paying that sales tax...just doesnt make sense sometimes...and i'm not telling you what to do...but you get cute for $6k, u get caught, you're gonna regret it big time. big time.

discoganya

If you can spend 70K on the car, spend the 6K for upholding the law and your peace of mind. Faking the transfer is perjury -- which is a felony offence. If you are caught -- There goes your legal record, your ability to get employed by some companies, your ability to get some state benefits, your status in soceity, and so on. This could be the most stupid move you could ever make.

Have some class, like the car you are buying.

calcareer

It can go both ways.

Sometimes you can get away with it, but remember, on higher dollar transactions, there will be more scrutiny.

I know of individuals who used the methods described in the second post above when registering motorhomes in California. The DMV later did an audit on the transactions and it did not turn out well.

I would consider the Porsche a high dollar transaction.

BC

I tried the gift idea. I was caught in the loophole a bit, where the true value of the car was then still needed.

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

MK19

Here's the deal;
DMV is not the tax agency......that's the State Board of Equalization. So DMV won't ask any questions (same with AAA) because they don't care and it's outside of their Job Discription. No matter what, the buyer is responsible for the tax. So, when the SBoE sees suspect transactions they come and ask questions and make you sign under penalty of purjury. If they don't like or don't buy your answers......they'll just acess the tax on you. Now; the SBoE isn't the prosicutor (again, out the Job Discription/Pay Grade) so they don't really care if you lie. They won't hassel you. But they do have a duty to turn over the suspicious to the proscecuter......now you have a real problem. You don't want to go there. Don't stretch your stated value.....yes it's up to you....so much as to arrouse suspicion. Or, as the fella's above have said......just pay what you owe.

CLL ACAB

One last option - Find a company to write you a lease on the car. Then you only pay sales tax on the montly lease payments. And if you decide to dump the car later, you didn't pay a whole bunch of tax for nothing. Just a thought......

CP

Another little known rule, but totally legal. If you bought a car out of state, and kept the car outside CA for over 90 days, there is no sales tax. This is meant for Californians who have temp. assignments away from home etc.

I bought my Ruf from the PO in Germany in July 2003, bill of sales and all proper documentation. The car finally made it to CA in December 2003. I registered it, and paid no sales tax. 100% legal. I'd not recommend making a habit of it though.

Good lcuk.

CP

TurboMark

that seems way to easy.......

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

ca993twin

One more thought on understating the car's value... can your insurance company go back and use that lower value if you total the car? I've never heard this being done, but insurance companies HATE to pay claims.

CP

Steve,

You might want to ask your agent what is the payout on your car in case of theft or total loss. Mine was $31,100: 1995 C2 at 116k miles. That's why I took out a agreed-value policy for $85k (agreed-value, not premium).

Your Turbo-R is worth a lot more than my BTR. You might want to know what kind of value the insurance company has in mind.

CP

ca993twin

CP,

You are right, and I should do this. Great advice from the Ruf Meister.