Why buy out of California

This is the publication to reference when purchasing a vehicle out of state.

Pub 52

There is much information in this thread that is in error or not correct. Pub 52 will give you the way to avoid paying California taxes, note i said avoid not evade as tax evasion is illegal.

On a $150,000 RV the tax at 7.25% (I think the lowest for CA some as high as 10%) is $10,875.00.

To answer the question why buy out of California? To save the sales tax on the purchase. If you buy a vehicle in CA you will pay the taxes for where you live if a CA resident or you will pay the taxes for the jurisdiction where you buy if you are not from CA. If a CA resident that lives in CA but properly buys out of state the vehicle will still be registered in CA through the DMV with the tax clearance from the Board of Equalization (BOE) if the RV does come back to the state. Note the DMV has authorization to collect for the BOE.


JimR

gemsworld wrote:
Some of you guys from out of state love to bash California taxes without really knowing what they are.

For starters, the sales tax is 8% to 9% in most jurisdictions. How does that compare to YOUR own sales tax? I know Oregon does not have a sales tax.

Registration cost on a new vehicle is about 5/8 of one percent plus roughly another $100, and then decreases every year. To put it in context, if you buy and register a $50K motor vehicle or RV in California, the registration fee will be around $412 for the first year. How does that compare to YOUR state?

Those of you that live in states without sales or income taxes end up paying much higher property taxes and other fees to make up for the difference. There is no free lunch...and no state is perfect.

When all the various taxes are factored in California is not the highest tax state, but it's pretty darn close to it. We moved way up the list with the increase in income taxes that we voted on ourselves a few years ago.

In Oklahoma we don't pay sales tax on any vehicle purchase. We do pay a 3% excise tax as part of the registration to get the title and tag.

path1 wrote:
You folks in CA will have it made when you get the high speed rail. Hope on board in LA and about hour be in Vegas and pick your RV up out of storage, stop and buy food and pay Nevada prices. RV never in CA to pay taxes or lic. What a deal.

The High speed rail they are talking about doesn't go to Vegas. I think some people in Vegas have discussed a high speed rail between there and Los Angeles, but that isn't even out of the discussion stages yet.

When you move into California, and have to register your motorhome and cars, they ask on the form what day you started working in California, and other 'difficult' to answer questions if you are trying to avoid the tax man.

Why complain? Well I guess anyone getting the shaft for $1000 or so would complain. However in California, where you can buy a $400,000 home and pay only around 1% tax each year, (well close - say $4,100 or $4,200 depending on the local tax on top of the basic tax). Here in Oregon, you can buy a house for around $250,000 and then pay close to $5400 in tax each year. A $400,000 home would have close to $7,900 in tax - at least near Portland OR.

So we don't pay sales tax, however the roads still need to be repaired, the trash picked up, sewage taken care of, fire departments funded, and all that. The money comes from someplace. Not sales tax, but much higher property tax per $1,000 in home value.

We also have a per foot length registration fee. So my 30' motorhome required a $310 fee for that the first time it is registered in Oregon.

Sure you can "Legally" buy a motorhome out of state, and leave it registered there for a number of years, then bring it into California. It will save you perhaps $1,000 - $1,500 in tax and registration fees. However you will be paying for storage, not getting to use the new to you RV for a while unless you take a long drive in your car to it's location. And several other dis-advantages.

You can also look at a small corporation in Montana and other states. The "Corporation" buys and owns the RV, you just use it when you like, and can park it where you like. The "Corporation" lives in Montana, or Nevada, or someplace. You might have difficulty explaining it all to your insurance company, or if you get pulled over for some random reason. I guess if you have a rental agreement with your corporation as the lesse, and you as the lessor, it will go a long ways to explaining why you have California drivers license and work in California, and own property in CA, but are driving a RV with plates from another state, and has a different address than your home - the home that all of your other vehicles are located at.

Your insurance company might also ask "Where is your vehicle garaged?" or Where is it stored? That can be a problem if it is out of state, and more expensive if not at your home. And a finance company might have a requirement that you not take "Their asset" out of state for any reason. (while that does not make sense for a RV loan, it is probably in that fine print when you sign the RV loan, it probably says you may not take their property out of state without prior permission, or must keep it at home except for temporary time out of your driveway at night, say up to a maximum 30 days at a time away from your primary residence. )

Good luck,

Fred.

gemsworld wrote:
Some of you guys from out of state love to bash California taxes without really knowing what they are.

For starters, the sales tax is 8% to 9% in most jurisdictions. How does that compare to YOUR own sales tax? I know Oregon does not have a sales tax.

Registration cost on a new vehicle is about 5/8 of one percent plus roughly another $100, and then decreases every year. To put it in context, if you buy and register a $50K motor vehicle or RV in California, the registration fee will be around $412 for the first year. How does that compare to YOUR state?

Those of you that live in states without sales or income taxes end up paying much higher property taxes and other fees to make up for the difference. There is no free lunch...and no state is perfect.

This info is from Tax Foundation dot org. The 5 States with the highest average combined State and Local tax rates are: #1. Tenn. 9.45%, #2. Ark. 9.19%, #3. LA. 8.89%, #4. WA. St. 8.88% & #5. OK. 8.72% where is Cali?

If you lived in CA and didn't want to licensed rv why not buy a "trip permit". That way the state get some $$ and you get to use RV. You both win.

buster52,
If you are serious about wanting to know how this tax exception works, Google "ca publication 52". Everything you need to know about this program is described in this document in vivid detail. It is perfectly legal, but not easy to actualize if you are currently employed since you must show proof of use outside the state of California for at least a year. You cannot simply store it outside CA and qualify. We kept our rig outside CA for four years and used it as much as we could to make sure we met the qualifications.

gemsworld wrote:
Some of you guys from out of state love to bash California taxes without really knowing what they are.

For starters, the sales tax is 8% to 9% in most jurisdictions. How does that compare to YOUR own sales tax? I know Oregon does not have a sales tax.

Registration cost on a new vehicle is about 5/8 of one percent plus roughly another $100, and then decreases every year. To put it in context, if you buy and register a $50K motor vehicle or RV in California, the registration fee will be around $412 for the first year. How does that compare to YOUR state?

Those of you that live in states without sales or income taxes end up paying much higher property taxes and other fees to make up for the difference. There is no free lunch...and no state is perfect.

And I bet some people that skirt the California fees are the same ones that complain about poor roads and services being cut. Just saying........

I don't believe that if you live in CA you will be able to get away with not paying taxes. Or Any other state for that matter.
One poster said he thinks states have an agreement to collect taxes for the state of residence. Oregon does for CA by law.
If you think by keeping it out of state for a year, you will avoid taxes, you are dead wrong. CA DMV only has to check registration to know whether or not you paid taxes on the purchase. Now, you may buy something in a state with less tax and pay that tax. When you get back to CA (even after a year) you will pay the difference between the tax paid and what CA tax is.
For you that register in another state and tow a toad or get into a wreak in CA, unless your toad and DL is from the same state as the RV is registered in, you are in deep doo-doo. You not only will pay the delinquent CA tax, but there is a heavy fine.
Least you want to trash CA, you need to understand that many states do the exact same thing.
Oregon actively seeks out those who fraudulently register vehicles in their state and not only fine, but confiscate plates and notify the state of residence about what happened.
So, you are far better off just paying the CA tax and having a wonderful time with your new purchase!