Reducing Sales Tax on your R8 in CA

[mecfire]

With the r8 being such an expensive car, has anyone figured out any creative ways to reduce the amount of sales tax they had to pay when buying their R8? I am in California so we pay 8.75% on the purchase price, regardless of a trade-in. I will likely be buying a slightly used r8 in the end. Any suggestions?

[mecfire]

I will be paying cash, however, it may be from an out of state dealership so I don't think I'll have much cooperation on lowering the apparent price. Any other suggestions?

[willyjp]

register it in Oregon! (there are ways: have a "business" in OR own it, etc.)...you can research this on the OR DMV website

Oregon has NO sales tax or auto excise taxes and auto registration fees are very reasonable (though assessed 2 yrs at a time); In the case of boats and airplanes (which are a little easier to "move around" in a way), Oregon is a notorious tax haven for registered ownership; a number of big California ocean racing sailboats have been registered and "home ported" in OR in years past; where you have a problem is if your local law enforcement is alert and notices that you regularly frequent an apparent CA residence with your out of state plates (Washington LEOs are very good at picking up WA residents w. OR plates!)

[timborama]

Not worth it. You get in an accident, and they find you're an actual CA resident, they'll fine, impound or worse. Happened to a friend that didn't register within 30 days of moving into CA. Taxes part of ownership.

[desperado]

Some of the responses to this discussion were against the rules. I deleted those few posts. To those posters, thanks in advance for your understanding.

You may not:
•Use the Web Site to instigate or encourage others to commit illegal activities or cause injury or property damage or interfere with business interests or contractual relations of any person.

[mecfire]

This discussion is against the rules:



Suggest some of you edit your posts. Thanks in advance.

So maybe I should specify...Legal ways to reduce sales tax in CA.

[willyjp]

Well, I'm cool with that, Desperado. Nothing I said about Oregon registration should be taken as a recommendation to knowingly violate any law. What i was suggesting should be considered under the well known heading of "organizing one's affairs to minimize taxes"

The fact is, there are a LOT of Washington and California people who take advantage of Oregon's zero sales/excise tax rates, some legally, some skirting the "gray" edges and some by clearly violating the law, which I definitely don't condone.

FWIW, we Oregon folks "take it in the shorts" the other way when we domicile and register a vehicle, boat or airplane in California or Washington. Even if you've owned the conveyance for YEARS, they will assess sales tax on the (current) retail value of your item when you are (forced) to register it when your stay exceeds a certain length or you have to leave the vehicle there even when you're still a legal Oregon resident.

So my recommendation is to read the regulations carefully and take full advantage of any loopholes that exist to (legally) avoid whatever tax you can! (unless you're Warren Buffet, in which case you can just write a big donation check! )

[R8Spyderman]

Are you saying that if you buy a $150K car and trade in one worth $100K, you still pay sales tax on $150K, not on the cash difference of $50K? That sounds absurd. I don't think any other state has such a tax scheme. After all, you already paid sales tax on your trade and then get zero credit for that? Amazing if true, especially considering how out-of-funds the state is.

[mecfire]

Are you saying that if you buy a $150K car and trade in one worth $100K, you still pay sales tax on $150K, not on the cash difference of $50K? That sounds absurd. I don't think any other state has such a tax scheme. After all, you already paid sales tax on your trade and then get zero credit for that? Amazing if true, especially considering how out-of-funds the state is.

That is what I'm saying...it is absurd and makes it expensive to switch cars (which I like to do frequently). That's why I started the thread, was hoping someone had creative ways to legally save some sales tax dollars.

[desperado]

Well, I'm cool with that, Desperado. Nothing I said about Oregon registration should be taken as a recommendation to knowingly violate any law. What i was suggesting should be considered under the well known heading of "organizing one's affairs to minimize taxes"
...
So my recommendation is to read the regulations carefully and take full advantage of any loopholes that exist to (legally) avoid whatever tax you can!

Well said and I agree.

There are very clear "bright line" tests in the California tax regs for determining whether transportation equipment is acquired for use in California and therefor subject to its sales and use tax. There is a cottage industry of consultants who specialize in guiding their clients through this maze. An internet search on 'sales and use tax consultant' should get you started. Most of them concentrate on aircraft and vessels since these tend to be big ticket items.