Hi,

I am purchasing my vehicle from my leasing company (BMW Financial) and
reselling it to a private party who is using an auto loan to pay.

I have been told by a few people that California, in particular, has a
law that allows sales tax to be paid just once -- by the ultimate
buyer -- rather than twice (once by me to acquire the title from BMW
Financial Services, and then again by the new buyer).  The only
reference I could find online was in this artcle:

http://www.edmunds.com/news/column/lowdownlowpayments/48244/article.html

The author states: "I was assured that if I bought the car from the
dealer, it was my right to resell it within 10 days without incurring
double sales tax. I even found and printed a copy of the law in the
California Vehicle Code that seemed to support this."

Can you please find the California Vehicle Code that says this, along
with any other important information about how I need to go about
doing it correctly?

Thanks!

Hello.

Please note that Google Answers provides general information and is
not a substitute for professional legal advice.
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This would seem to be the provision that you're seeking:

"Revenue and Taxation Code Section 6277 - Vehicle Use Tax Law
6277.   There shall be a presumption that a transfer of a vehicle to a
lessee by a lessor, as defined in Section 372 of the Vehicle Code, was
a sale for resale if the lessee transfers title and registration to a
third party within 10 days from the date the lessee acquired title
from the lessor at the expiration or termination of a lease. The
presumption may be rebutted by evidence that the sale was not for
resale prior to use.
source: California DMV
http://www.dmv.ca.gov/pubs/vctop/appndxa/revtax/rvtax6277.htm

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Just to digress for a minute...

I notice that your question asks about not having to pay "sales tax"
twice. Technically, though, the sale from you (as a non-dealer) to the
third party isn't subject "sales tax." It's subject to "use tax" (the
sales & use tax rates are the same, though).

See the California Board of Equalization's explanation of this:

"In California, transfers of tangible personal property for a
consideration (sales and purchases) are subject to sales tax or use
tax unless the law provides an exemption. Although the rates are the
same, sales tax is imposed on the retailer for the privilege of
selling tangible, personal property in this state. Use tax is usually
the responsibility of the purchaser. Vehicles, vessels, and aircraft
purchased from licensed dealers are usually subject to sales tax,
which is collected at the time of purchase. Use tax applies to the
cost of vehicles, vessels, and aircraft purchased from non-dealers or
from outside California for use in this state. Private party sales or
brokered transactions are normally subject to use tax. If first use of
the property occurs in California, use tax may apply even if the
purchaser is not a resident of the state."
http://www.boe.ca.gov/sutax/faqtrans.htm

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Getting back to your question...

You can see Section 6277 in the context of complete Revenue & Taxation
Code at leginfo.ca.gov:
http://www.leginfo.ca.gov/cgi-bin/calawquery?codesection=rtc&codebody=&hits=20

You may want to familiarize yourself with the general Sales & Use Tax
provisions beginning at Section 6001. Basically, though, there is a
presumption that your sale was for resale, and therefore not subject
to sales tax, if you resell the leased vehicle within 10 days.

The same provision is listed as Regulation 1610(d)(2) in a document
available on the Board of Equalization web site:
Regulation 1610: Vehicles, Vessels & Aircraft
http://www.boe.ca.gov/pdf/reg1610.pdf


To be perfectly honest, from my research, it seems like this is a
fairly arcane provision of the Revenue & Taxation Code.  You may get
some resistance in trying to invoke this provision.  My advice to you
would be to print out these various code sections and present them to
whomever you're buying the car from.  If worse comes to worse, you
might have to pay the tax and then try to get a refund later. See:
Cal BOE: 12. How do I request a refund? (Section 6901)
http://www.boe.ca.gov/sutax/faqtrans.htm#twelve

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tax, "within 10 days" site:dmv.ca.gov 

I hope this helps.  Good luck!

Thanks.  Just what I was looking for.