Absurd California Vehicle Sales Tax Laws?? (San Jose, Santa Clara: fit in, vehicle registration, car insurance)

[thundersnow]

I have a 2006 Mazda that I bought in Virginia and paid 3% sales tax on. According to this calculator, I would owe no sales/use tax to California upon registering my vehicle in the state:

https://mv.dmv.ca.gov/FeeCalculatorWeb/index.jsp

HOWEVER, if I buy a new 2007 car this December and waited to register it upon moving to California, I would have to pay nearly 12% sales/use tax? What gives? I even calculated the CA sales/use tax based on an '06 car bought in another state where ZERO sales tax was paid and the CA sales/use tax owed upon registration was still zero.

One year difference in the age of the car is all that stands between paying no tax and paying 12% Surely that can't be. Can anyone clear this up?

Thanks!

[sonarrat]

If you already paid 3% sales tax then you are responsible for the difference between that and the local sales tax rate - which is 8.25% in Santa Clara County. You are being fed incorrect information. And of course, if the vehicle was purchased more than 12 months ago, you're in the clear.

[thundersnow]

Thanks for the clarification. Actually it seems that if the vehicle was purchased 120 days before moving to CA, then no sales tax would be owed to CA.

Using this calculator:

https://mv.dmv.ca.gov/FeeCalculatorW...esidentForm.do

If I enter a purchase date of today and a "First Operated in CA" date of March 1, it claims I would owe no taxes to California. However, if I enter mid February as "First Operated in CA" date, it computes the difference between the 8.25% CA sales tax in SC county and the 3% sales tax paid in VA.

If I travel a few miles into Maryland to buy a new car, I would pay zero MD sales tax (being a VA resident) and be provided with 60 day temporary registration. Seems like if I was willing to take the additional 60 day risk of driving in CA with expired temporary tags I could effectively avoid paying sales tax on the car. Obviously, this is illegal, but the loopholes are interesting.

[Ultrarunner]

CA has a hot line for reporting vehicles owned be CA residents with out-of-state tags. If you are California employed, the chances of getting caught are greater.

Even doing it legally, you may be asked to prove the vehicle was operated in another state for 120 days.

A friend of mine ran into this problem when he was told transit or storage time does not count when calculating the 120 days

A co-worker of mine was always getting stopped because her car had Florida plates. Her husband is deployed in Iraq and Florida is his "Chosen" home state. Military personnel have some latitude in Home State status.

Anyway, she actually had to make a court appearance because the Highway Patrol insisted CA registration is required because she had CA Driver's License and was CA employed. The judge decided in her favor... but it was still a big hassle and waste of time.

The last time she was stopped, she showed the officer her military status AND a copy of the Court Decision she won. The Officer thanked her family for their service and wished her a pleasant day.

Proof can be as simple as a couple of gas station receipts from out of state covering the 120 day period.

[DanT0007]

Can anybody point me to where the 120 day law is?
I moved to California well past the 120 days, but left my car in Arizona because the tax was outrageous.

[Franklyn]

Just go to the CA DMV website and start drilling. Its a great site with lots of info.

In my years of experience as a DMV manager I found most people expected things to be worse than they turned out to be. People spent huge sums in cash, time and energy trying to finagle their way out of paying amounts that could have ended up being fairly reasonable. When fraud is uncovered, it is extremely expen$ive on the vehicle owner to resolve. Why waste your time?

My recommendation is to go into a DMV office [with an advance VR (vehicle registration) appointment, of course] and make sure you pass the attitude test the first time you're at the window. It never hurts to ask how to cut your costs, but if the fee is due it is simply due. If you want a supervisor to explain it to you, just ask.

And if any of the staff are rude [shouldn't happen], ask for the office manager. If he or she is rude [how can this be?], ask for the phone number for the region manager. If you get no help there be prepared to contact your assembly person or state senator.

Or if you're an auto club member you could go to one of their offices.

Best of luck. Welcome to California. Now get to work!

[Lynn Lee]

Looks like there's folks who know what they are talking about....so I'll ask my question... Scenario: I bought a car for myself August 2008 from a dealer here in Hawaii. I paid taxes on the car at the time. My mileage currently is under 6,000 miles. My daughter attends a private college in California, no residence status. She is a sophomore who now needs a car. If I transfer ownership to her here in Hawaii and then ship the car to her, will she have to register the car with California DMV and pay sales tax on the car? We'd like to keep the car registered here in Hawaii and have it covered by our insurance company here. What issues do we need to be aware of? Help!

[Franklyn]

Originally Posted by Lynn Lee

We'd like to keep the car registered here in Hawaii and have it covered by our insurance company here. What issues do we need to be aware of? Help!

Because your daughter is attending a private college your situation is a bit easier. First, though, here are some questions that need to be answered:

• Will your daughter be living on or off campus? [Some municipal parking permits require CA registration, some don't].
• What will your daughter do with the car between semesters [or quarters], when she is out of school? [If she loans it to anyone who takes it out of the local area it could cause big problems for them].
• Will she be doing any extended travel out of the immediate area of the school? [Tourist traps watch for OS licenses to reel in revenue].
• Does your daughter intend to work off campus at any time during her stay at the college? If so, will she use the car to go back and forth? [Her driving pattern could unnecessarily come under the scrutiny of an enforcement officer].
• And will she earn income enough to pay CA income tax? [CA VR could be required].
• Does your daughter intend to register to vote in California? [CA VR required].

Those are a few of the situations that could trigger her/your responsibility to register it in CA.

Once paid, you would NOT have to again pay sales [or what we call "use"] tax if you register it in CA.

Are you certain your insurance company won't still cover the vehicle even though it is registered in CA? Mine doesn't have any problem with that under the conditions you've outlined.

Do you intend to return the car to HI afterwards? If not, selling it here with an out-of-state license could lower it's perceived value due to questions as to title, etc.

Unless the college is located in an area near a large military base, thus has more of them, an out-of-state license might more easily call the car to others' attention. Are you sure you want this for your daughter?

If my daugher or son were going to Colorado or Arizona to school I would register their vehicle there so they could "fit in" more easily with the local campus and community lifestyles. It's a slight nuisance but I think the peace of mind it would give far outweighs any cost.

Answer my questions and I'll dive into the subject more deeply to quote chapter and verse if you still wish to follow your original plan. Best of luck either way.

[Lynn Lee]

Originally Posted by Franklyn

Because your daughter is attending a private college your situation is a bit easier. First, though, here are some questions that need to be answered:

• Will your daughter be living on or off campus? [Some municipal parking permits require CA registration, some don't]. I'll have her check
• What will your daughter do with the car between semesters [or quarters], when she is out of school? [If she loans it to anyone who takes it out of the local area it could cause big problems for them].She will not be allowed to loan the car out...too much liability. She will be going to unpaid externships this summer (that's why she'll need a car)
  
• Will she be doing any extended travel out of the immediate area of the school? [Tourist traps watch for OS licenses to reel in revenue]. She might occasionally do short trips in the area, but I don't really want her driving to LA or anything like that.
• Does your daughter intend to work off campus at any time during her stay at the college? If so, will she use the car to go back and forth? [Her driving pattern could unnecessarily come under the scrutiny of an enforcement officer]. She has an on-campus job during the school year.
  
• And will she earn income enough to pay CA income tax? [CA VR could be required]. I don't think she earns enough, but I will check
• Does your daughter intend to register to vote in California? [CA VR required]. Not at this time
  

Those are a few of the situations that could trigger her/your responsibility to register it in CA.

Once paid, you would NOT have to again pay sales [or what we call "use"] tax if you register it in CA.

Are you certain your insurance company won't still cover the vehicle even though it is registered in CA? Mine doesn't have any problem with that under the conditions you've outlined. We'll check on that too,,,,I've heard Cali insurance is really high, but I want to be sure she is covered.

Do you intend to return the car to HI afterwards? If not, selling it here with an out-of-state license could lower it's perceived value due to questions as to title, etc. If she stays and works in Cali...she'll have to keep the car.

Unless the college is located in an area near a large military base, thus has more of them, an out-of-state license might more easily call the car to others' attention. Are you sure you want this for your daughter? She's in Santa Clara

If my daugher or son were going to Colorado or Arizona to school I would register their vehicle there so they could "fit in" more easily with the local campus and community lifestyles. It's a slight nuisance but I think the peace of mind it would give far outweighs any cost.

Answer my questions and I'll dive into the subject more deeply to quote chapter and verse if you still wish to follow your original plan. Best of luck either way.

Thanks! Lots of great questions....at this point, it all seems so complicated...We may end up just buying her a new car from a California dealership...that way there shouldn't be any questions, problems etc....we'll just have to pay for the privilege of her having a car in California!

I had no idea it was so complicated!...Thank you for your time and info...please send me any of your thoughts! I really appreciate it!

[Lynn Lee]

Next issue....car insurance for a 20 year old....where's the best place to get that!!! Should the car be registered in San Jose or Santa Clara? Does it make a difference?