Out of State Sales Tax California/Virginia

paterwdb

Hey folks...

I'm a Virginia resident (non-military) who wants to buy a car from a California dealership and drive back to Virginia. It's a combination of the right car, right price, and the time to make the cross-country drive.

The dealer is telling me that California requires me to pay the sales tax there, even though it is being registered in Virginia. They say they've done this many times and had a few rejected when they tried to pay the out of state tax instead. From what I see online this might be true, unless I were to take possession out of state via a delivery service.

1. Does anyone know if there is a way around this?
2. Will Virginia credit me for the taxes paid, or will they require me to double pay the tax?

Thanks!

28firefighter

I’ve heard that CA dealers are required to collect CA sales tax if a vehicle is going to touch CA roads. They can give you an exemption if the car is being shipped.

You should be able to get credit for it though towards your VA taxes when you register but you should confirm.

Not an ideal situation.

paterwdb

Thanks, @28firefighter. From what I can tell that seems to be the case. Kind of crazy on the California side.

Virginia's language online seems like they waive the tax if you've paid it within 12 months in another state, but that seems to envision you registered and titled it out of state and then moved into Virginia. It seems unclear if you're titling it right to Virginia. If I'd have to pay the tax in two states, the purchase isn't worth it.

kyfdx

paterwdb said:

Thanks, @28firefighter. From what I can tell that seems to be the case. Kind of crazy on the California side.

Virginia's language online seems like they waive the tax if you've paid it within 12 months in another state, but that seems to envision you registered and titled it out of state and then moved into Virginia. It seems unclear if you're titling it right to Virginia. If I'd have to pay the tax in two states, the purchase isn't worth it.

I doubt VA and CA have any sort of reciprocity agreement. Unless you are willing to have the car delivered, I don't see a way around it.

paterwdb

Was going to fly out to CA and make the cross country drive, but realized I don't have enough time to enjoy the drive. So I ended up just having it shipped to Virginia. The money I'll save not paying the tax in CA will more than pay for the shipping - and cover quite a few of the modifications I might want to do.

The down side is the CA dealership is not a BMW dealership and they wouldn't add the Virginia taxes into the purchase, so I'll have to pay them in cash at the VA DMV (and thus can't include them in the financing).

kyfdx

paterwdb said:

Was going to fly out to CA and make the cross country drive, but realized I don't have enough time to enjoy the drive. So I ended up just having it shipped to Virginia. The money I'll save not paying the tax in CA will more than pay for the shipping - and cover quite a few of the modifications I might want to do.

The down side is the CA dealership is not a BMW dealership and they wouldn't add the Virginia taxes into the purchase, so I'll have to pay them in cash at the VA DMV (and thus can't include them in the financing).

Congrats!