Avoid Sales Tax?

Discussion in 'General RVing' started by Harry_, Feb 18, 2007.

  1. Harry_

    Harry_ New Member


    I am new to RVing as well as I am new to the US. I am from Europe living in Southern Cali now. By surprise I figured that if I purchase a - lets say digital camera - online from a shop in NY, I would not have to pay sales tax, while if I do the same in a store next door or at an online retailer which is located in California, I have to pay that tax.

    As this does not necessarily kill me on a 300 bucks camera, it would be nice if - somehow - this would be possible for buying a slightly more expensive RV in a 50,000 to 100,000 dollar price range. So what if I, a "Californian" (from Austria, btw) would order/purchase my RV from a dealer in Arizona, Nevada, or elsewhere? Could I save sales tax, or would it be their local sales tax, or ...?

    This might be a dumb question, but anyway

  2. hertig

    hertig Senior Member

    Re: Avoid Sales Tax?

    It's a great question, which many people have asked, and the answer is, maybe, under some circumstances.

    The reason you don't pay tax on the camera, is because the sale does not happen in place where tax can be levied, i.e. the transaction 'happens' over the internet/phone/mail, etc. Neither the state of the seller or the state of the buyer has jurisdiction over this non-place If you could get a RV 'through the mail', you might be able to avoid paying sales tax. However, generally when you buy a RV, either the seller comes to you, or you go to the seller, and wherever you meet up has tax jurisdiction. And you better believe they want theire 8% of 100,000.

    But there are places where there is no Sales Tax, and if you buy your RV there, you won't pay any. Or will you? Remember, we're talking big bucks here, and no government wants to lose out. So let us say you go to Nevada and buy the RV. You drive it back to California and try to register it there. I suspect the registration fees will be 'enhanced' to make up for the lack of sales tax on the purchase, since the people in the government weren't born yesterday, and this has been tried before.

    Ok, so you try to register it somewhere else. You will find some places where the registration is quite reasonable, and other places where they are quite horrendous and/or there are luxury taxes or extra sales tax or other fees. But let's say you find a place where you can register it for a reasonable amount. And again you drive it back to California, and again they get you, because there is almost always a rule about registration 'matching' the location where the unit spends 'most' of its time. In Arizona, if you are a resident, you must register all vehicles in Arizona within I think 15 days of the vehicle entering AZ, or they come down on you. In California, I've heard something about a rule that a vehicle registered out of state must not enter the state within some period of time (6 month?) or perhaps must spend more than some number of months out of state).

    So, as long as you are a resident of California, you must pay california what it wants on your RV. If you don't want to do that, you will have move your residency to a state which has RV costs you like, even if you don't spend much of your time there. South Dakota, Florida and Texas are friendly to 'full time' RVers, I understand. However, even if you are a 'resident' of another state, CA may come down on you if you live or work in their state for more than some percentage of the year.

    One other possibility I have heard of but don't know anything about, is setting up a South Dakota corporation to buy and own the RV. If the legal owner of the RV is not in California, then it is difficult for CA to charge them anything. But as I said, governments aren't about to let money get away from them, so if this would work, or for how long it will work, I don't know
  3. Stormin

    Stormin Member

  4. lhollatz

    lhollatz New Member

    RE: Avoid Sales Tax?

    Or, you can purchase it in California and arrange with your dealer to take delivery in Nevada. You register it in CA but pay no sales tax as long as you can prove that the RV is out of the state more than 90 days of the first six months you own it. Same thing holds for boats in CA.

    Happy Motoring :)
  5. risky business

    risky business New Member

    RE: Avoid Sales Tax?

    Hmmm, avoiding sales taxes? The next thread may be why are our state park camping fees rising. Hmmm, maybe, just maybe
    those sales taxes do benefit us in a round-a-bout way.
  6. Kirk

    Kirk Senior Member

    Re: Avoid Sales Tax?

    If you wish to avoid legal problems, I suggest that you get advice from a lawyer licensed in California as it is not legal to register your new RV in any state except the one where you are residing and the state of California has been very aggressive on that issue. The law requires that you must pay the sales taxes in the state where you register the vehicle and to be legal that is the state where you live and work. If you are a fulltime RV traveler then you can pretty well register it anywhere, but if not, you could find yourself in some very serious difficulties if you take the advice here and do not register properly in California.
  7. Harry_

    Harry_ New Member

    RE: Avoid Sales Tax?

    Thank you all for the very helpful input, very nice of you, really appreciate it!

    As “risky business” seems worried that I would do harm to the US of A in avoiding/reducing taxes if it could be done legally, I just want to let you know that I had to invest a higher six figure amount of money in the USA and pass several checks from officials including home land security to get a 5 years non-immigrant visa granted (=not even an immigrant visa, or Green-Card as it is called). I have not taken one single dollar from anybody here in the States but I declare and pay each and everything as this is my nature and as I would not risk my visa at all. I am not so sure if all the companies I visit here in Southern California with all the nice Mexican people working there share the same approach - but maybe I am completely wrong and all of them came here with a six figure dollar amount, being registered and pay all taxes and fees as you and I do ;-)

    Btw, I - or lets say my lawyer did it before I came to America - had my company registered in Nevada as I guess this was the most flexible solution at this time. So, I think I might be able to register it there (theoretically), and I will "give up" my residency here in Southern Cali anyway as I want to travel the whole country (I don't know which my home State then would be as I don’t own a home here and will have no rent then anywhere?).

    Btw, one more word about taxes and fuel: Coming from Austria, I can tell you that the price for a gallon is about double the amount than it is here, and that more than half (I think 60 or 65%) of it is taxes! And whoever thinks that if a State - wherever in the world - get taxes from car/RV owners would use it for roads and other traffic related issues may well dream on. Any government takes money wherever it can and spends it on completely different things wherever they need it.

    Thanks again everybody,

    Btw, if anybody know a decent CPA here in the Irvine area in Orange County please let me know.
  8. TexasClodhopper

    TexasClodhopper Senior Member

    Re: Avoid Sales Tax?

    Well, Harry, welcome to the USA! You're the kind of "immigrant" we're all talking about! The legal kind that follows the laws and rules ... and buys RV products and services.

    Come on down here to Texas! We want you ... and your money! ;)

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