sales tax loophole (just curious)

[Freelance Superhero]

i'm not familiar with tax policy in a lot of states, but i know that oregon has no sales tax. therefore, i was wondering, let's say i lived in oregon and bought a car there. then a few months (or years, or whatever) later, my job required me to relocate to, let's just say California to make it easy. what is the policy on the sales tax i never had to pay when i purchased the car in oregon?

and if there's no penalty, what's to stop someone from going up to oregon, purchasing a car there, and driving it back here to california and changing the registration (assuming you had a friend who lived in oregon who was willing to let you use his address for registration purposes)?

i'm just curious to know what kinds of policies are in place to prevent this kind of thing (because i assume that such policies must exist).

[Cubsfan]

and if there's no penalty, what's to stop someone from going up to oregon, purchasing a car there, and driving it back here to california and changing the registration (assuming you had a friend who lived in oregon who was willing to let you use his address for registration purposes)?
I think that's fraud. So, nothing can stop you, if you don't mind a few years in prison if you get caught :)

[marchk]

When I was in the Navy, I was living in WA. I was still claiming NH (no sales tax) as my home residence.

When I bought my first vehicle in WA, I told the salesman that I didn't have to pay sales tax because I live in NH. So I saved myself about 600 bucks.

At the time, someone told me it was perfectly legal, now it doesn't sound like it was, but the salesman didn't seem to mind.

[bachviet]

i'm not familiar with tax policy in a lot of states, but i know that oregon has no sales tax. therefore, i was wondering, let's say i lived in oregon and bought a car there. then a few months (or years, or whatever) later, my job required me to relocate to, let's just say California to make it easy. what is the policy on the sales tax i never had to pay when i purchased the car in oregon?

and if there's no penalty, what's to stop someone from going up to oregon, purchasing a car there, and driving it back here to california and changing the registration (assuming you had a friend who lived in oregon who was willing to let you use his address for registration purposes)?

i'm just curious to know what kinds of policies are in place to prevent this kind of thing (because i assume that such policies must exist).
You have to prove that you use that car in Oregon to the California DMV at least 50% of the time. If you already register the car in Oregon, you could just transfer the registration to CA and pay the additional registration fee.

[InfiniteNothing]

Sounds like tax evasion to me :shrug: You can probably get away with it unless you are audited but who knows.

[Merlin]

You are allowed to buy the car whereever you want. If it is better for you to buy up in OR than do so. This is not tax evasion (not legal) but rather tax avoidance (legal)

As for the registration - you need to do that where you live. I assume that California is more expensive than OR but thems the breaks. You can register in OR and drive in CA but if/when you get pulled over you'll get a ticket for it. If you don't get pulled over for a while you might come out ahead in the deal. What state is your driver's license from? If it is from CA you will get the ticket. If it is from OR just give him your fake address there and you should be fine.


I think that's fraud. So, nothing can stop you, if you don't mind a few years in prison if you get caught :)
No, you would just get a ticket. They don't throw people in the slammer for bad registration location.

[Cubsfan]

No, you would just get a ticket. They don't throw people in the slammer for bad registration location.

I don't know. I have to believe that registering a car with a fake address has a more harsh penalty than a ticket.

[Merlin]

Believe what you want but for having an incorrect/out of date address on your registration you only get a ticket.

[bachviet]

You are allowed to buy the car whereever you want. If it is better for you to buy up in OR than do so. This is not tax evasion (not legal) but rather tax avoidance (legal)

As for the registration - you need to do that where you live. I assume that California is more expensive than OR but thems the breaks. You can register in OR and drive in CA but if/when you get pulled over you'll get a ticket for it. If you don't get pulled over for a while you might come out ahead in the deal. What state is your driver's license from? If it is from CA you will get the ticket. If it is from OR just give him your fake address there and you should be fine.


No, you would just get a ticket. They don't throw people in the slammer for bad registration location.
CA does slam you for all the registration fees that you have avoided in the past. The DMV even encourages pple to report cars registered out of state but operate in CA.

[Grimm]

You have to prove that you use that car in Oregon to the California DMV at least 50% of the time. If you already register the car in Oregon, you could just transfer the registration to CA and pay the additional registration fee.
California used to have a $300 fee for bringing a car in from out of state. It was to prevent people from buying cars in other states and then bringing them here. A Federal Judge found that it was a restriction on free trade and California had to pay it all back, plus interest. So, now there is no additional registraton fee for bringing a car from out of state to register.

Sales tax is charged in the place the transaction takes place. If the parties are in different jrisdictions when the transaction occurs, the tax is charged where they buyer is located.
So, if you call up a dealership in Oregan and buy a car over the phone, you owe tax. If you go up there, buy it and bring it back, no tax.

[MrGreg]

I'm originally from OR, currently live in OR, and formerly lived in CA. I looked into this when I was living in CA. This is what I remember, though something might have changed.

When you buy a car in OR, you MUST register it in OR. Then when you go to register it in CA, they make you pay CA sales tax on the car unless it is at least 6 months old (maybe 12 months?) So you can't just buy a new car across the border and then register it for cheap. I think there is some sort of exception if you are on a road trip out of state and your car dies (totalled), you can replace it and avoid the fee.

If you really want to buy a fancy expensive new car in OR and let it sit for 6 months, you can leave it at my house, but imma' gonna' drive it :D

[Freelance Superhero]

I'm originally from OR, currently live in OR, and formerly lived in CA. I looked into this when I was living in CA. This is what I remember, though something might have changed.

When you buy a car in OR, you MUST register it in OR. Then when you go to register it in CA, they make you pay CA sales tax on the car unless it is at least 6 months old (maybe 12 months?) So you can't just buy a new car across the border and then register it for cheap. I think there is some sort of exception if you are on a road trip out of state and your car dies (totalled), you can replace it and avoid the fee.

If you really want to buy a fancy expensive new car in OR and let it sit for 6 months, you can leave it at my house, but imma' gonna' drive it :Dhaha okay...

well, that's basically the info i was looking for. i was just curious to know if CA would make you pay the sales tax you intentionally tried to avoid by purchasing the car in OR, and also if there was some sort of time period after which that policy was waived.

now i know, and if and when i am in the market for a new hooptie, i'll keep it in mind. ;)

[raimin]

well you have an argument if you live in this city

http://www.latimes.com/news/local/la-me-bordertown26jun26,0,6042285,full.story

Burneikis embodies the loyalties people feel to their side of New Pine Creek. Last year, after her divorce, her ex-husband got the house, which is on the Oregon side, forcing the 64-year-old to rent a home two houses south of the border.

Now she's a refugee.

"I've lived in Oregon all my life," she said. "I miss it over there. I'm moving back as soon as I can."

[x1337xD335C1P13x]

Sounds like tax evasion to me :shrug: You can probably get away with it unless you are audited but who knows.


first word that came to mind reading this thread "tax", the second being "evasion"... :stupid:

[ufcrusher]

The car has to be operated in Oregon for over 6 months to avoid paying the sales tax. That said, when you go to register it in California they do rake you over the coals. They charge you a percentage based on the cars value. So you get screwed no matter what. If its a truck, they also add on a weight charge!

[Mike_N_Ike]

One other problem with using a friend's residence to register the car is that if you're not paying cash for it, you may run into a problem with the bank financing the car since the address (probably) won't appear on your credit bureau anywhere.

A lot of people who live in LA county try to buy the cars in OC so that they'll pay a half a point less in sales tax. They'll try registering it to a PO box in Orange County and then moving it over. Most of the time the banks won't allow it though.