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Avoiding used car sales tax

alchemista 2,608 695 November 22, 2015 at 05:42 PM
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I've reviewed previous threads and they are all over the place.

Can we get a simple answer on how to avoid car sales tax as much as possible? It might be state-specific so just post a brief from your state.

Seems like it generally goes like this:
1. Find an out of state dealer who is willing to sell the car without collecting tax (or who will agree that you will be registering it in a no car sales tax state like OR)
2. Purchase the car with your temp tag (usually only about $20, based on FL)
3. Mail-in registration to a no car sales tax state (need info here - what do these states require to register and how to satisfy that)?
4. Use this tag for a while until you are exempt from transferring the registration to your final state.
5. Do a registration transfer to your final state.

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#2
Problem is don't these state require you to actually live there to register your car?
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#3
Quote from traker1001 View Post :
Problem is don't these state require you to actually live there to register your car?
They require you to have whatever is needed to do the registration, which varies by state. We need to figure out which states are the easiest to get a tag from, and what you need. If you just need a utility bill from the address, a friend could help, etc.
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#4
Alaska, Montana, New Hampshire, Delaware, and Oregon are the only states without sales tax. You will have to apply for a title along with registration in whichever state you choose to register the vehicle. In Delaware, for example, you need to provide proof of insurance and pass a DMV inspection before you can register/title the vehicle (according to the official DE DMV booklet).

Now in terms of eventually moving the vehicle over to FL registration, I would imagine you would pay sales tax at that time. In PA, there is no sales tax charged if you have owned the vehicle for at least 6 months before moving to PA, but the determination to charge tax or not is based on the owner's residency status, not the vehicle's license plate status.

On a side note, it seems unwise to post a thread inquiring about how to break the law on such a public forum as SD. :p
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#5
Quote from ManUpOrShutUp View Post :
Alaska, Montana, New Hampshire, Delaware, and Oregon are the only states without sales tax. You will have to apply for a title along with registration in whichever state you choose to register the vehicle. In Delaware, for example, you need to provide proof of insurance and pass a DMV inspection before you can register/title the vehicle (according to the official DE DMV booklet).

Now in terms of eventually moving the vehicle over to FL registration, I would imagine you would pay sales tax at that time. In PA, there is no sales tax charged if you have owned the vehicle for at least 6 months before moving to PA, but the determination to charge tax or not is based on the owner's residency status, not the vehicle's license plate status.

On a side note, it seems unwise to post a thread inquiring about how to break the law on such a public forum as SD. :p
This isn't about breaking the law, it's about working the system as it is today legally with loopholes.

AK - if you live in a remote area of AK (no DMV within 50 miles of road access), you can mail-in your registration - http://doa.alaska.gov/dmv/titles/remoteak.htm
$100 registration fee biennial, mail has to come from that remote area

MT - apply at the county treasurer's office for the county you live in

NH - new title application has to be filled out by authorized agency like town clerk, NH dealer

DE - VIN check required from a DMV inspection station or new car dealer, before title

OR - VIN check required from DMV before title


So AK looks most interesting.
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Last edited by alchemista November 22, 2015 at 10:43 PM
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#6
Quote from alchemista View Post :
This isn't about breaking the law, it's about working the system as it is today legally with loopholes.
Even if you want to attempt that semantic argument on the tax point, falsifying proof of residency is illegal as is submitting false documents to the DMV. There's no dancing around that one. I honestly don't care; I'm just pointing out that it's not particularly wise to leave a paper trail of your willful desire to break the law. Clearly, that's your call though.
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#7
You don't have to title in a no-tax state to benefit either. You could also benefit in a low-tax state.
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#8
As others noted, unless there is a state that lets you register with out being a resident (not aware of any), then you are out of luck. If you have residency in multiple states due to multiple residences or can claim such from a business you are part of then maybe you can switch the registration to the state with the lowest sales tax, but that is probably as far as you can legally go. When buying a car, sales tax is pretty much unavoidable if you have it in your home state. They will collect upon your registration.
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#9
Quote from YanksIn2009 View Post :
As others noted, unless there is a state that lets you register with out being a resident (not aware of any), then you are out of luck. If you have residency in multiple states due to multiple residences or can claim such from a business you are part of then maybe you can switch the registration to the state with the lowest sales tax, but that is probably as far as you can legally go. When buying a car, sales tax is pretty much unavoidable if you have it in your home state. They will collect upon your registration.
Quote from YanksIn2009 View Post :
As others noted, unless there is a state that lets you register with out being a resident (not aware of any), then you are out of luck. If you have residency in multiple states due to multiple residences or can claim such from a business you are part of then maybe you can switch the registration to the state with the lowest sales tax, but that is probably as far as you can legally go. When buying a car, sales tax is pretty much unavoidable if you have it in your home state. They will collect upon your registration.
They usually won't collect tax if you are transferring your out of state title that is already in your name.
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#10
Quote from YanksIn2009 View Post :
As others noted, unless there is a state that lets you register with out being a resident (not aware of any), then you are out of luck. If you have residency in multiple states due to multiple residences or can claim such from a business you are part of then maybe you can switch the registration to the state with the lowest sales tax, but that is probably as far as you can legally go. When buying a car, sales tax is pretty much unavoidable if you have it in your home state. They will collect upon your registration.

Pretty sure ME allows that.

There is an issue in CT where people are registering their cars in ME to avoid property taxes.
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#11
You're obviously trying to commit fraud and you're an idiot if you think you're the first one to think of this or that states don't already have laws in place to stop it. Even if a state only required a power bill to establish residency and you have a legitimate power bill you're committing fraud by using a legitimate power bill to claim residency in a state you don't live in. I also see you mention Florida, if you somehow registered you car outside Florida and live there you would be in violation of this Florida law which is a criminal misdemeanor

320.02 Registration required; application for registration; forms.—
(1) Except as otherwise provided in this chapter, every owner or person in charge of a motor vehicle that is operated or driven on the roads of this state shall register the vehicle in this state.
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#12
Quote from maramos View Post :
You're obviously trying to commit fraud and you're an idiot if you think you're the first one to think of this or that states don't already have laws in place to stop it. Even if a state only required a power bill to establish residency and you have a legitimate power bill you're committing fraud by using a legitimate power bill to claim residency in a state you don't live in. I also see you mention Florida, if you somehow registered you car outside Florida and live there you would be in violation of this Florida law which is a criminal misdemeanor

320.02 Registration required; application for registration; forms.--
(1) Except as otherwise provided in this chapter, every owner or person in charge of a motor vehicle that is operated or driven on the roads of this state shall register the vehicle in this state.
I don't think I'm first to think of this obviously, but there are many threads without any type of clear summary.

It appears to me that if your business and/or multiple residence includes a remote area of Alaska, then it is the only no-tax state to allow mail-in for registrations.

I haven't checked any other low-tax states for their rules, but was hoping someone had already compiled the info.
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#13
Quote from alchemista View Post :
I don't think I'm first to think of this obviously, but there are many threads without any type of clear summary.

It appears to me that if your business and/or multiple residence includes a remote area of Alaska, then it is the only no-tax state to allow mail-in for registrations.

I haven't checked any other low-tax states for their rules, but was hoping someone had already compiled the info.
In order to register car in Alaska you must either be a resident or plan to be a resident which requires living in Alaska for 12 months. If you're willing to live in Alaska for a year then you found your loophole. Otherwise if you try to register the car there and don't plan on becoming a resident your probably committing crimes in both Alaska and your home state.
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#14
keep it in the other persons name
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#15
Can we just start a thread on tax evasion?
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