CA car taxation, $%$#%$

[Deschodt]

Hmm... Every state I've lived in, when you buy a car and trade-in your old one, you get taxed on the difference. Seems normal, that's all the money actually coming out of your pocket.

But apparently NOT in California, where they tax you on the entire amount of the new car. If you think about it for a minute, that's extortion... I hadn't not really found a reason to complain about the state since moving here (not that I was looking) but I just did... It's not smart either, net result is a lost sale... It makes no sense to trade in a car, if that's the case: Usually the tax savings partially offsets the dealer ripping you a new one (black book pricing)! But in that case, you are much better off selling privately... interesting! Learned something... You bend over for the dealer, and you stay bent over for the state !!

Apparently CA, Hawaii and DC do that... Rat ba$tard$$ ! Sorry, just venting... thought the salesman was lying to me but that's the law here... Anyone need a nice 2010 S4 ? ;-) Kidding... Might keep it now...

[bleucamaro]

yup. Guess what happens if you buy a used car. You pay sales tax on it... but they won't call it sales tax.

[J P Stein]

Washington State does about the same as Ca.........but, if you buy an old classic they have a book with the list of their value....& .the book rules. The value of my #3, 65 Mustang fastback was around $20K.....with a top of 49K for a #1.
Of course that was last year..........

[ckissick]

My father owns are car dealership so when I buy a car I get a a very good deal, of course. I also know how much profit is in the cars. Typically, the State makes way more than the dealer. On a new car, the dealer might make a few hundred, while the State makes a few thousand.

[SoCal911T]

Originally Posted by bleucamaro

yup. Guess what happens if you buy a used car. You pay sales tax on it... but they won't call it sales tax.

They call it a "Use/Sales Tax", "Sales/Use Tax and "Sales Tax" interchangeably... And no, I've never thought it was fair either.

[Porsche-O-Phile]

You're far better off buying a new car out-of-state and bringing it into CA. The rule when I lived there was you had to have 10,000 miles on a car being brought in from out-of-state to avoid CA sales tax ( might be the same now, might be different). I looked very seriously at buying a new car in either AZ or FL and bringing it to CA and just driving it for a few months on the out-of-state registration (admittedly "rolling the dice" a bit but the odds were very much in my favor and enforcement of resident out-of-state car registrations was pretty much non-existent where I was from what I could tell). I'd probably have done it but I ended up buying after deciding that a new car just wasn't worth the extra money (didn't want to eat the first year depreciation).

The tax structure in CA is insane. It's a factor in why I left and a major factor in why I didn't open my own practice there (I'm practicing elsewhere based out of a more business-friendly state).

Car ownership in CA is a cash cow for state, county and municipal governments and they milk it every chance they can using a variety of tactics. Enjoy!

[John Rogers]

In CA if you get something at a discount such as a new smart phone for 50% off, you are still taxed on the full price.

[SoCal911T]

Originally Posted by Porsche-O-Phile

You're far better off buying a new car out-of-state and bringing it into CA. The rule when I lived there was you had to have 10,000 miles on a car being brought in from out-of-state to avoid CA sales tax

It's now 7,500 miles but you still pay Sales/Use Tax no matter where the car came from.

Originally Posted by Porsche-O-Phile

Car ownership in CA is a cash cow for state, county and municipal governments and they milk it every chance they can using a variety of tactics. Enjoy!

I guess it's changed since you were here, my car ownership costs are very reasonable.

[Porsche-O-Phile]

Compared to what? My insurance is about ¼ what it was in CA and the registration is about ⅓. And gas is a lot less expensive too (lower tax component). And no smog check. And fewer toll roads. And fewer pay-to-park places... And fewer ticky-tack citations issued just to transfer money from vehicle owners to the state... The list goes on and on.

Yes, you CAN afford a car in CA but it's a lot more than it needs to be IMHO based on what I see in other states, including where I am now. Heck, even Illinois was cheaper when I lived there and that's saying something!

I think you're right now that you mention it - 7,500 miles sounds right rather than 10k. Whatever it was I felt it was worth the risk.

[SoCal911T]

Originally Posted by Porsche-O-Phile

Compared to what?

I don't know, you're the one that doesn't list your location.

My insurance is cheap, my registration is cheap, I've never paid a toll, and the few times I need to pay for parking, I've never had any problem finding a spot. I haven't had a 'citation' for anything in years so I can't really speak to that.
I will give you gas is too expensive but that's mostly political.

[A930Rocket]

IIRC, taxes are maxed out here in SC at $300 dollars no matter what the price is.

[look 171]

Buy a new car, it get tax on it. Sell that used car, new owner pays tax on it again, when it get sold the third, fourth or fifth time, it get tax again and again. Shouldn't it be tax only one time when it was new?

[Deschodt]

I ended up buying elsewhere, and we structured the deal so that the focus was on a lower new car price and getting less for the trade in.... Saves taxes that way. I still think it's effed up, to tax on the full value of something you only paid 30% of, when trading-up!

There is really no incentive to buy nice cars in state... I'll investigate the out of state rules when doing that again for me (this was the wife's).

[scottmandue]

IIRC is still a free country, if you don't like that taxes in the state you are living in you are free to move to another state.

[Steve Carlton]

The way I figure it, every state has to meet their budget somehow. Oregon for example has no sales tax. But their property taxes are higher than CA.

Only paying tax on the difference is nice if you're buying a car and have one to get rid of. It makes trading in financially attractive vs selling privately. But I got to believe the trade in values are lower than they would have been, since the dealer knows you're saving the tax on the trade-in. So, you're paying tax in a different way, with a lower trade-in allowance. The market adjusts for things.

[Jim Richards]

Originally Posted by scottmandue

IIRC is still a free country, if you don't like that taxes in the state you are living in you are free to move to another state.

Yep. Or to another country.

[Deschodt]

Originally Posted by Steve Carlton

Only paying tax on the difference is nice if you're buying a car and have one to get rid of. It makes trading in financially attractive vs selling privately. But I got to believe the trade in values are lower than they would have been, since the dealer knows you're saving the tax on the trade-in. So, you're paying tax in a different way, with a lower trade-in allowance. The market adjusts for things.

In my recent experience, that's not really the case though. A dealer will low ball you the same way wherever, it's in their blood :-) It makes a substantial difference when trading in say a 35k car for a 50k one. Anyway it is what it is, I was surprised because it is uncommon fleecing, I think only 5 states do this out of 50.

[Jim Richards]

It certainly encourages private sales instead of trading in.

[930addict]

When I was in the market for a truck I could not find one I liked local. I found one sitting on a dealers lot in Georgia that I fell in love with so bought it and had it shipped to my house. I paid tax to the state of georgia and still got hit with this monstrosity from the state of california:



Notice line 03 - that's the weight fee. Because my truck was considered oversize (1 ton dully)
line 04 - that's the vehicle license fee

then you have the "Use fee" This is a brand new vehicle that had only 2 miles on it when I received it. They don't call it sales tax. That's just the great state of California bending me over the barrel. I'm so glad I moved from there. My registration in my new home state was only $180.

[Steve Carlton]

If California has a reciprocal tax agreement with Georgia, you should only be charged the difference between our rate and theirs if we're higher. If you trucked it out of Georgia, you shouldn't have had to pay them tax.