How Oregon residents can save sales tax on out-of-state car purchase
09-25-2014, 01:09 PM
#1
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How Oregon residents can save sales tax on out-of-state car purchase
I'm sharing this info for archival purposes in case someone searches for it in the future. I just went through this process, so I know it works at the date of this posting.
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Tax is determined by the state in which you take possession/devliery of goods. This means if you purchase an out-of-state vehicle and drive it off the lot in that state, you have taken possession/delivery in that state. You must pay taxes for that county/state.
Example: if an OR resident buys a car in CA and drives off the lot, he pays that CA county's sales tax rate. The seller/dealer is required by law to include (collect) tax in the vehicle's Bill of Sale.
The trick for OR residents to save tax (Oregon sales tax rate is 0% for those who don't know) is to buy the car out-of-state and have the vehicle shipped to Oregon. Do not drive off the lot. By shipping the vehicle, you are taking possession/delivery in Oregon and are required to pay Oregon sales taxes (0%). The out-of-state dealer will not collect taxes from you, and they will list on their DMV forms that this is a sale where the vehicle will be transported to Oregon.
In the Example above, CA Sales Tax is governed by the California Board of Equalization (BOE) under Regulation 1620. Link:
http://www.boe.ca.gov/lawguides/busi...sutr/1620.html
Here's the BOE's specific statement from that Resolution.
If anyone has questions about this, please PM me. I'll be glad to help. I'm not a lawyer; just FYI.
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Tax is determined by the state in which you take possession/devliery of goods. This means if you purchase an out-of-state vehicle and drive it off the lot in that state, you have taken possession/delivery in that state. You must pay taxes for that county/state.
Example: if an OR resident buys a car in CA and drives off the lot, he pays that CA county's sales tax rate. The seller/dealer is required by law to include (collect) tax in the vehicle's Bill of Sale.
The trick for OR residents to save tax (Oregon sales tax rate is 0% for those who don't know) is to buy the car out-of-state and have the vehicle shipped to Oregon. Do not drive off the lot. By shipping the vehicle, you are taking possession/delivery in Oregon and are required to pay Oregon sales taxes (0%). The out-of-state dealer will not collect taxes from you, and they will list on their DMV forms that this is a sale where the vehicle will be transported to Oregon.
In the Example above, CA Sales Tax is governed by the California Board of Equalization (BOE) under Regulation 1620. Link:
http://www.boe.ca.gov/lawguides/busi...sutr/1620.html
Here's the BOE's specific statement from that Resolution.
(B) From Other States—When Sales Tax Does Not Apply. Sales tax does not apply when the order is sent by the purchaser directly to the retailer at a point outside this state, or to an agent of the retailer in this state, and the property is shipped to the purchaser, pursuant to the contract of sale, from a point outside this state directly to the purchaser in this state, or to the retailer's agent in this state for delivery to the purchaser in this state, provided there is no participation whatever in the transaction by any local branch, office, outlet or other place of business of the retailer or by any agent of the retailer having any connection with such branch, office, outlet, or place of business.
Last edited by rhswest; 09-25-2014 at 01:50 PM.
09-25-2014, 01:37 PM
#2
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I wonder to what other states this applies, very good information I was wondering about that. I did the same with my car where I bought it out of California and took possession of it here in Colorado, don't quite remember if I payed double tax or not.
09-25-2014, 06:46 PM
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1. You are a resident of a county/state that has sales tax > 0%. Let's take CA for example.
2. You visit Oregon (state with 0% tax) and purchase a vehicle. You don't pay tax at the time of purchase.
3. When you take the vehicle back to CA and register it, CA will charge you tax on the vehicle, even though you purchased in OR.
This ensures people can't just buy a vehicle from a state where there is no tax and bring it back to their resident state.
09-25-2014, 06:56 PM
#5
Super Member
This is what I came into the situation believing before I researched it. The confusing part is that your statement is true if and only if the following occurs:
1. You are a resident of a county/state that has sales tax > 0%. Let's take CA for example.
2. You visit Oregon (state with 0% tax) and purchase a vehicle. You don't pay tax at the time of purchase.
3. When you take the vehicle back to CA and register it, CA will charge you tax on the vehicle, even though you purchased in OR.
This ensures people can't just buy a vehicle from a state where there is no tax and bring it back to their resident state.
1. You are a resident of a county/state that has sales tax > 0%. Let's take CA for example.
2. You visit Oregon (state with 0% tax) and purchase a vehicle. You don't pay tax at the time of purchase.
3. When you take the vehicle back to CA and register it, CA will charge you tax on the vehicle, even though you purchased in OR.
This ensures people can't just buy a vehicle from a state where there is no tax and bring it back to their resident state.
