So I read all about the Monterey delivery option and signed up for it – a very cool, once-in-a-lifetime opportunity, followed by the exciting MINI Takes The States drive.
Deposit to MINI of Peabody, signed paperwork, etc – everything good and exciting. A little lacking in communication from MINI USA, but oh well …
Now today, a letter from MINI USA (the second) – and for the very first time, we are told:
The State of California imposes a use tax upon the first use of a new vehicle in California. Since you will be taking delivery of your new vehicle in California, this tax applies.
The first time use tax will not be collected by your retail center or BMW [not MINI!]
Should the State of California decide to collect this tax from out-of-state consumers, it would be billed by the State of California and payable directly to the same [legal nonsense – why not write this stuff in ENGLISH!].
In the event taxes are assessed and taxes were paid in your home state, recovery or credit of taxes may be available in full or part. Note that such recovery may not be available from all states.
We are sorry for the inconvenience this may cause you.
So I guess if they’re sorry, that’s OK.
And why didn’t they tell people this BEFORE they signed up?
It’s all very vague and who-knows-what …
Who will tell California that I’m picking up a car in that state? Not me!
How much might I be liable for?
Who decides, if I am billed, whether I can recover it from Massachusetts?
This whole GP event sometimes seems to be two steps forward and one step back; it’s very annoying š¦
M&I / GBMINI 
So far, my web reading says that to avoid use tax, I must IMMEDIATELY leave California after picking up the GP!
A purchaser is not required to pay California use tax if the only use of the property purchased in California is to remove it from the state and it will be used solely thereafter outside this state. No other use can be made of the property. For example, you … purchase a boat in San Diego and immediately leave for home. Along the way,you stop at Marina Del Rey, have dinner, and have a boat decal added. The next day you fish in the Channel Islands .Later, you stop to visit friends in San Francisco … The California use tax applies because you had made a personal and recreational use of the boat in California, not simply removed it from the state
This suggests I mustn’t touch or drive the car till I’m ready to leave the state, and I mustn’t stop in Santa Barbara!
Now, according to this web site, if California apply a “use tax”, I can use it to offset my Massachusetts tax – but since the California tax rate is more than Massachusetts, I still end up out-of-pocket (just not by quite as much!)
Ian:
I my experience the only way that California would know you picked it up there is if you were to try and register it there.
eg. when I picked up my MINI at MoP in Mass, I didn’t pay any sales tax, but because I hadn’t paid it, I owed it when I registered the car in Vermont.
Hopefully Mass is like Vermont and you can get registration before you pick up the car. I arrived at MoP with a set of Vermont plates, (real, metal ones) based on faxed documents I goit from MOP The provisional registration was good for 30 days and in that time I had to front up at the VT DMV with the original documnets, proof I’d actually bought the car and proof that I’d either paid sales tax at at least 6% or with a check for the 6% tax (I bought the check).
If you could get a provisional Mass reg. show up with Mass plates, then finish reg when you got home, then I think you could avoid paying the Cali. tax.
Just a thought. If Mass. don’t help, you could always get a Vermont address!
If MINIUSA were honorable, they would have checked with CA and determined if there would be a use tax before sending the letter, then volunteered to pay it for those of us making this event possible. The more involved with this I become, the less impressed I am with MINIUSA.
I think the letter is for their legal protection only. I don’t think the DMV has the resources to track such transactions.
I’d pay cash for your hotel rooms, etc….leave no (computerized) trail….from credit cards….
I got that letter today too. It sure sounds like each sentence gently contradicts the previous one so that they can cover their backsides. I agree this whole roll-out makes me feel like their guinee pig.
That said, I looked at the CA Board of Equalization web site and my take on it is that they are well focused on CA residents and the rule is to keep them from licensing out of state to avoid taxes. There is mention of a “90 day rule” of thumb that I am going to rely on. Also it says that DMV is the collection arm of the process and so there is little reason to expect their involvement. I am going south with WA plates in hand and expect no trouble. FWIW I have owned and/or sold thousands of cars in many state and rules are rarely applied strictly or perfectly. This should all fly under all of the radar and if it doesn’t there is a clear process to contest it.
The problem with the “90 day” rule is that the GPs will not have been somewhere else for at least 90 days prior to the sale in CA.
I agree that “under the radar” might be how it goes, but I’m not comfortable with that being the only option available!
I’ll be baack!
Of course the other problem with “under the radar” is that a huge, manufacturer-sponsored event, with lots of news coverage (which is one of the things I figure MINIUSA will be after) is hardly “under the radar” like a quiet, individual purchase might be….
Having said that, it would be nice to be sharing the problem with you all. lol
If your Sarah Conner don’t come here.
I figure if I go out with a hard metal license plate and my bill of sale for the state in which I live (Kansas) how in the heck would the state of California have any idea that I’m not just on vacation?
The under the radar approach sounds like a plan to me. Besides, they’ll have to catch me first! : )
I’m not worried at all. MINI USA is just playiing CYA letting us know that this is a possibility (as outside as it may be.)
There are 34 million people living in the state of California and you gotta figure it’s not likely to track down 20 or so owners in a four day period two of which happen to be a weekend. I’m a rebel at heart so I’m willing to risk it.
He found Sarah Conner!… and Sully!
I’m sure you have checked into this and found that MA does not issue temporary tags. And, technically, it is illegal for you (a MA resident) to “own” a car you have purchased with another state’s temporary tags that will be garaged in MA. I went through all sorts of complications when I was thinking of purchasing a classic Mini from Long Island.
In order to get MA plates, you need to register the car in MA, pay the MA tax, and supply all the dealer’s paperwork (proof of insurance coverage, Certificate of Origin, Odometer Statement, etc.). So the question arises regarding who holds these documents and will they be available to you BEFORE you go to CA? Will they be provided to MoP? If you will get the paperwork in CA, you may have no choice but to get CA temporary tags.
8^(
I should ammend the above as follows:
If you are TRANSFERRING MA plates from one vehicle to another, you have 7 (I believe) days to notify the insurance company and execute the plate transfer with the registry. That means that you could drive on the old plate and the dealer’s paperwork without immediately registering it. However, that’s only 7 days…MTTS will be longer than that.
8^(
Theo,
We are required by MINI USA to provide completes sales paperwork and copies of the plates to them prior to the Monterey event – this presumes that they supply to “CO” early enough to complete all the MA paperwork …
Ian, I also remembered an incident that happened a few years back to a friend. He had lived in New Hampster for several years, got married, they continued to live there for a couple of years after and then moved to Taxachusetts. The Mass DOR came after him for sales taxes, accusing him of living in NH to avoid them. Huh?
He ended up paying ~$600 as it was the far cheaper option of hiring a lawyer and fighting…which I imagine they count on.
Moral is that I’m sure you’ll get far greater scrutiny here than in CA…
Chris
My MA(motoring advisor) is getting together all that will be necessary for me to go to CA from WA with my actual plates and registration. In fact, since you cannot get vanity plates here until the car has real plates, he is going to do it soon enough to get them too. WA just started making the vanity plates on a printer in downtown Seattle so you can get them on very short turn around.
As far as it goes, I have driven to other states many times to pick up cars I have purchased. I have even been pulled over by those states’ cops with expired tabs on them and once I showed my Bill of Sale and Title was waved on without even a ticket for expired tabs because they all realize the silliness of registering the car in a state where I don’t live.
The tax laws we are worrying are for states that are adjacent to “tax free” states where a dodge would be feasible. For Example, CA and WA have high sales taxes and OR has none so it is not uncommon for CA folks to register the vehicle to a PO Box in OR to save thousands on Motor Homes, Boats, Planes and cars.
As to vanity plates… is it too corny to get
ITALJOB since it was built by Bertone?
I’ll try and find the paperwork from my MCS purchase (I bought it in Long Island) but I’m sure I went down there with MA plates. As Theo said, MA won’t issue temp plates, and I think I remember that if I’d taken temp plates from the dealer, then I’d have been charged tax there. As it was, I had to pay tax to MA, which I would have had to do to get plates anyway. I do remember they had to put an inspection sticker on it (and charge me) and then I had to get a MA one two days later (and pay again).
I would think that if you’re on MA plates with a MA bill of sale from a MA dealer, there’s no way CA can get you for tax. I don’t see how they’d collect it, unless they set up a road block at the gate after delivery..!
I agree though, that this could have been disclosed a lot earlier on, but they had trouble getting people to sign up anyway – I’m sure this would have killed the Monterrey delivery for all but CA owners.
its the reverse situation, I know, but when I bought my first MINI in AZ and registered it in CA, I actually got a refund (of a $!) because the taxes in AZ turned out to be higher than CA. So maybe if you end up paying CA taxes you will get some of it back. Anyone gone to their local DMV to ask?
But as Gavin says, aren’t you buying your vehicle from the local dealer, just that delivery is in CA. Even though I am sure they will if they can, I don’t see that CA has any claim. But IANATA š
Logically CA shouldn’t have a claim – but they have a state law which targets “first use” of a “product”; obviously not intended to cover this sort of event but “the letter of the law” definitely seems to apply if I have my “first use” of the GP in California, and I don’t immediately leave the state.
By “the letter of the law” I’d have to pay CA first use tax (around 8%), then I could reclaim against my MA tax – but that’s only 5% so I still lose 3% to CA.
Now “the spirit of the law” no doubt says we shouldn’t have any trouble, but if some high and mighty CA official sees all the PR for this event, rubs his hands and decides to collect a few extra $$$ from the out-of-staters, we could be in trouble.
I intend to not use the GP while in CA, and will head directly out of state. I may have to stop and rest, maybe in Santa Barbara, overnight because I don’t want to have an accident from driving while sleepy. š
That’s my answer and I’m sticking to it. š
Dudes! relax already – just grab the car and drive it like you stole it! In fact, go right ahead and steal it!
Don’t forget to turn on that COP control toggle!
Ian, am sending you an article from todays’ WSJ…about how California went after Dave Duffield and others — now they’re in a much higher tax bracker — but thought you’d find it interesting.
“Brady Anderson, a native Californian who played center field for the Baltimore Orioles in the early 1990s, was dunned with a $322,410 California tax bill after claiming Nevada residency in 1993 and ’94. The tax authorities “looked at where Brady was, every single day, and they subpoenaed credit-card receipts,” recalled his accountant, Joseph Geier.”
See this weblog post for a happy outcome to this issue š