Is it possible for residents of California to buy a car in Oregon?
When you buy a new vehicle in the US, most states have a sales tax.Since tax laws vary by state, it is not always clear which state should receive the tax when you purchase a car out-of-state.If you don't know how to pay the state sales tax, you will end up with a tax evasion fine.
When you buy a car in a different state than where you live, the car dealer will collect your sales tax at the time of purchase and send it to your home state's relevant agency.You don't have to deal with the hassle of following each state's tax laws.The bill of sale can be checked by the Department of Motor Vehicles in your home state to make sure you paid the sales tax.
If your home state's sales tax is higher, you may have to make up the difference if you are buying a vehicle from an out-of-state dealer.To avoid confusion when you register at the Department of Motor Vehicles, make sure you get a bill of sale from the dealer for your vehicle purchase price with the tax included.You don't want to be in a situation where you have to pay the sales tax twice because the dealer forgot to send the paperwork.Each jurisdiction has its own tax laws and there are approximately 10,000 sales tax jurisdictions in the US.You might have to pay local taxes on top of state ones.
Depending on your home state's laws and the state in which you bought the car, you can determine how much sales tax you need to pay.Some states give credits to each other when their residents pay sales taxes in other states.Arizona has tax agreements with other states.California residents who buy a car in Arizona may be exempt from paying the Arizona sales tax, but they still have to pay it in California.Before making a purchase in your state, you should check their web page for the state's tax relationships with other states.
If you give the car dealer proof that you intend to register your car in your home state, you can avoid paying sales tax in non-reciprocal states.When you register your car in your home state, you can simply pay the sales tax if you buy your vehicle from a private seller.If you take this approach, the Department of Motor Vehicles in your home state may need to check the car's vehicle identification number to make sure it matches the out-of-state title.
Legal differences between states are not limited to taxes.A smog test is required before a vehicle can be registered.The California Air Resources Board is very strict in this area.State safety standards often clash.If you buy a car in another state, there is no guarantee that you will be able to register it in your home state.Car taxes between states vary a lot.Next-door neighbor Massachusetts has a state car tax rate of 6.25 percent, with some local rates much higher.
When asking for financing from a lender, it is helpful to know how much sales tax will be paid.
When buying a car in another state, shoppers must take into account any special circumstances.Most states give tax credits for trade-ins, when you give your old car to a dealership to cover part of the cost of a new car.
California, Michigan, and Virginia do not offer tax credits in this circumstance.If you buy a used car instead of a new one, you have to pay sales tax.When buying a used vehicle, you don't need to pay the tax to the vehicle dealer or private party, but you must pay it when you register your vehicle in your home state.
California charges use taxes when you bring in a car from out-of-state even if you have already paid the sales tax.You have to pay an excise tax on the car's value when you register it in Oklahoma.Yearly excise fees are charged by some states for vehicles.
You have to pay the sales tax with these fees.Paying close attention to these details before buying a car can help you better understand some of the broader and rolling tax costs associated with the potential purchase.