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TAX question

Joined
5 April 2001
Messages
66
Location
Fridley, MN
Hello all,
I am from MN, and planning to buy a used NSX. The car is in California. This is the first time I am buying a car from out of state.
Do I have to pay tax in CA when I buy it ? When I change the title, I have to pay MN tax again.
Does that mean I have to pay twice ?
 
Do I have to pay tax in CA when I buy it ?
When I change the title, I have to pay MN tax again. Does that mean I have to pay twice ?


No, because you will get a credit in MN for anything you pay in CA.

In most states, vehicle taxes include sales tax as well as license and registration fees. Both of these items are normally paid by the purchaser in his home state only, and not in the state where the seller is located. But you should check to find out whether you need to pay anything to California. One place to start is the California website for their Department of Motor Vehicles, at http://www.dmv.ca.gov/ There is some information for buyers and sellers at http://www.dmv.ca.gov/faq/regfaq.htm#BM2520 but the buyer needs to report the purchase to his home state DMV, not to California.

The seller's current California title should show a transfer to you. You then use this to get a Minnesota title on it. More Minnesota title information at http://www.dps.state.mn.us/dvs/MotorVehicle/dvstitle.html

Information about paying 6.5 percent Minnesota sales tax on the purchase of a motor vehicle is at http://www.state.mn.us/ebranch/mdor/salestax/factshts/salestax/1250301.pdf In that document, you'll see that it states:

"Vehicles purchased in another state. Minnesota allows credit for state sales tax required to be paid to another state. However, if the other state's tax rate is lower, you owe the difference in rates to Minnesota."

So even if you DO need to pay any sales tax to California, you will then get credit for it in Minnesota.

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[This message has been edited by nsxtasy (edited 10 April 2001).]
 
In most states, vehicle taxes include sales tax as well as license and registration fees. Both of these items are normally paid by the purchaser in his home state only, and not in the state where the seller is located.

I intended that last statement to refer to a purchase from a private individual. If you are purchasing from a dealer, they should be able to tell you whether California sales tax applies (and if it does, you'll get credit for it in Minnesota).
 
Here's another link. The California Board of Equalization is the government body that collects sales taxes. Their website is http://www.boe.ca.gov

Their Publication 52 ( http://www.boe.ca.gov/pdf/pub52.pdf ) states:

"Unless an exemption applies, either sales or use tax applies to vehicles or vessels purchased for use in California."

Also, their Publication 101 ( http://www.boe.ca.gov/pdf/pub101.pdf ) states clearly that if the vehicle is being shipped to you in Minnesota, there is no California sales tax applied.

Both these items seem to say that you should not need to pay California sales tax on your purchase if you are going to be using the car in Minnesota.
 
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