Dear Alexander,
Please read page 10 of the instruction booklet you originally located.
http://www.boe.ca.gov/pdf/pub52.pdf
It will give you the specific outline of the requirements to qualify
the car:
1) It needs to be purchased out of state, with you taking title out of
state.
(In other words, you will need to register it in Oregon.)
2)The first time you use it must be outside California (i.e. in
Oregon)
3) You have to use it in Oregon for 90 days, after you take possession
of the car (regardless of when you take title), before bringing it to
California.
(Their logic, you might have taken title earlier, when you ordered it.
But only taken physical possession a month or so after placing the
order.)
As to the documentation about the car purchase, that's pretty
straightforward. I think you can handle that. The real question is,
how do you handle the documentation to prove you used the car for
those 90 days.
Just to speed things up, I called the SBOE and went to the horse's
mouth.
Here's what they said.
To avoid paying the Use Tax, you have to wait to register the car
in California until AFTER the 90 days in Oregon has elapsed.
You have to prove that you used the car in Oregon. In other words,
that YOU (the registered owner) were there, either living there or
vacationing, etc. Simply parking it and coming home won't do.
Proof they require? Dated receipts during that 90 day period from
your various purchases while in Oregon - Target, grocery stores,
gasoline receipts, hotel rentals or utility bills, if you own your
own residence. In other words, you need to prove that you were there
with the car during those 90 days.
I asked them, what if it's your child or family member who used the
car during that time. The SBOE gentleman said that would make the
proof
more complicated - and you'd have to provide additional proof to
substantiate the relationship...but, you'd probably get it accepted.
One thing I noticed, though, after talking to them, is the "six month
rule."
It seems you only need to go through all these gyrations if you bring
the
car in before the six months expires. If you leave the car in Oregon
for
6 months and 1 day, you can bring it in without all the complicated
receipts
to substantiate the use of the car.
Only, bottom line, to avoid the sales or use tax, you can't register
the car
in California until you bring it into the state.
Incidentally, they gave me a phone number to the SBOE's Vehicle team,
if you have more detailed questions. 916-445-9524
Or you could always ask me later and I'll call them for you, if you
don't
want to identify yourself.
Briefly, to summarize the answers to your 3 questions:
1) You can't register the car in CA until the end of the transaction.
2) You will have to go through normal procedures to take possession
of the car in Oregon. You will have to get Oregon plates.
When you want to bring it to California, it's possible that your
Oregon dealer can do it for you, But I doubt it. Just go to DMV
to register it. Or, if your a AAA (ACSC) member, they can probably
do it for you.
3) Leaving it in storage for the 90 days won't work. I might if you
leave it in storage for 6 months and 1 day.
I do hope this helps.
Best wishes
TaxMama-ga |
Request for Answer Clarification by
alexander-ga
on
04 Sep 2002 17:49 PDT
Thanks for the info. Just a quick clarification, please:
>Here's what they said.
>To avoid paying the Use Tax, you have to wait to register the car
>in California until AFTER the 90 days in Oregon has elapsed.
I just want to confirm that the SBOE told you that I would have to
*register* the car no sooner than 90 days after delivery.
And second, there seem to be two ways to do this -- either not bring
the car into CA within 90 days, which you addressed, or bring the car
into CA within 90 days BUT have it outside of California for at least
50% of the time for the six months immediately after entry.
For this scenario, the registration requirements are a little less
clear. I assume that it would be trivial to get a "trip" registration
from Oregon, valid for a week or two. If I then immediately bring the
car into CA, would I be able to register it here while staying in the
bounds of this second rule?
The purpose of this law is to allow California residents to purchase a
car for use outside of California. Most states (or at least Oregon)
require residency to register a car there, so it doesn't make sense
for me, a California resident, to have to register a car in a state
which I do not have residency in.
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Clarification of Answer by
taxmama-ga
on
04 Sep 2002 18:49 PDT
Hi Alexander,
I love your last comment "so it doesn't make sense for me, a
California resident, to have to register a car in a state which I do
not have residency in. "
Remember, you're purpose here is to try to avoid paying a hefty tax in
California. From what you're describing, wanting to buy the car, get
it
delivered in another state, and store it there, you don't really have
a
legitimate reason to be leaving the car in Oregon. It's simply a
maneuver
to not pay California's 8.25% sales tax.
Looking at your taste in cars, (from other questions you have posted)
most likely, you stand to save at least $2500 in California sales
taxes by this procedure.
So, if Oregon doesn't let you register a car where you're not a
resident,
well now, that's a whole other issue...
California's purpose in leaving that loophole in the law is for people
who move
to California or live and work across state/national lines (Oregon,
Arizona, Mexico, New York (actors) etc.) to be able to leave a vehicle
in the other areas and bring the car in here without double taxation.
They are not trying to
make it easy for you to get around the taxes. That's not their job.
You may want to look at other states as an alternative. In the Bay
area, you're closer to Nevada than Oregon. What does it take to
register a car in Nevada?
Besides, it's more fun to go visit it. (See Nevada DMV
http://www.nevadadmv.state.nv.us/nvreg.htm#general )
On the other hand, your observation "it would be trivial to get a
"trip" registration from Oregon, valid for a week or two. " is
interesting. Go ahead and get the longest trip registration available.
Get receipts to prove you are using and driving the car in Oregon for
the first several weeks. Do it for as long as you can. You should be
able to get it for a long-term consulting project, yes?
I don't honestly believe that you'll be able to register the car with
California's DMV without paying the sales tax so soon after you buy
it.
The concept of the sales tax waiver is that your purpose is not to use
it in California. Read the wording of the 'six-month rule' - "presumed
to have been purchased for use in California, unless..." The state of
California will
try to prove that you had always intended the car only for California
use.
It's your job to prove you didn't.
That's why, trying to register it in the state prematurely will
convince them
that your Oregon storage of the car is bogus (like that legal term?).
I wouldn't do it.
Incidentally, if you want to search all 50 states for the most lenient
DMV rules, here's a link to all 50 states DMV's
( http://www.nevadadmv.state.nv.us/50_state_dmv_list.html )
Since you're willing to travel to rent a car for one day...;~)
you may be willing to travel to save taxes and fees.
(Yes, I saw that. I hope you find a place that will let you can try
out that car.)
Good luck!
TaxMama-ga
(oops, I posted the answer in the wrong field. Sorry.)
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