# Can you buy a new car without paying tax?



## Agamemnon (Jun 21, 2002)

I'm just wondering if someone has a reseller license and has a buisness in which they can buy stuff without paying tax can they also buy a car without paying tax?


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## Jon Shafer (Dec 15, 2001)

Agamemnon said:


> *I'm just wondering if someone has a reseller license and has a buisness in which they can buy stuff without paying tax can they also buy a car without paying tax? *


Sorry Agamemnon,

You'd need a dealer's license for that in the State of CA,
and presumably elsewhere...


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## beewang (Dec 18, 2001)

Agamemnon said:


> *I'm just wondering if someone has a reseller license and has a buisness in which they can buy stuff without paying tax can they also buy a car without paying tax? *


:lmao: :lmao: :lmao:

I can't believe I heard that. A re-sell permit is for *RESELL* ONLY!! Unless you're in the car biz (need dealers license), you are consider as the "end consumer" and you must pay appropriate sales/use tax for your home state of CA.


A Seller's Permit issued by CA BOE is NOT a "tax free pass" for the permit holder. This means that if you own a Burger joint and goes to Costco for your purchase of supplies you can get 'em tax free (because you will resell them, technically) but you can't be buying razor blade, tooth paste or Dog food without paying sales tax because you are the end of consumption line.

beewang:bigpimp:


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## Terry Kennedy (Sep 21, 2002)

*Re: Re: Can you buy a new car without paying tax?*



beewang said:


> *...without paying sales tax because you are the end of consumption line.*


That is quite true for a "resale" tax certificate. There are also "exempt" tax certificates. Available categories are non-profit, educational, and religious (there may be others). I don't know if any of those are valid for purchases of automobiles, but even if they were there would likely be serious problems with trying to beat the tax - most states want proof of tax being paid before they will title/register a vehicle, and if you try to avoid this by using an exempt organization as a "front", the vehicle will be titled/registered in their name and _they_, not you will be the owner of record/insured loss payee.

At least in the "old days", some people would get around this by being a used car dealer and driving the car around with dealer plates as a personal vehicle for months (or years) on end. I think there has been more active enforcement of the (various) laws that this violates.


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## Agamemnon (Jun 21, 2002)

True but what about Demo units that some places use? And what about Company Car? Hey I'm just asking these questions sheesh! don't have to get all up tight about it.  And there are places that buy items and don't resell them and use them for other purpose in there store such as I mentioned a demo unit etc.


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## Tanning machine (Feb 21, 2002)

I think Terry Kennedy's post is right on. There are probably ways to avoid paying the taxes, but only in circumstances that do not include personal use.


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## Terry Kennedy (Sep 21, 2002)

Agamemnon said:


> *True but what about Demo units that some places use? And what about Company Car?*


Cars taken on test drives get dealer (either new car dealer or used car dealer) plates as appropriate. But those plates are only for that purpose. A dealer can lose their insurance coverage and/or their use of the dealer plates if they use them for personal purposes. That's what happened to my ex's stepfather in the early 80's - he was doing the used car dealer scam and they caught him at it.

There's also a "vehicle manufacturer" plate, at least in some states. That comes with a whole list of _other_ restrictions and isn't really relevant to this discussion.


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## Roadsterwench (Sep 21, 2002)

Agamemnon, FWIW I sympathize completely. Compulsory taxation is immoral; unfortunately, it's impractical to try and escape it.


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## MikeW (Dec 20, 2001)

I don't know if this is still the case, but there used to be a few states that didn't have sales tax. Delaware comes to mind. Alot of people in NY would by stuff down there (cars and boats in particular), register them down there, and keep them in NY. I remember that NY used to send inspectors around to the public garages to check plates. If you had a DE registered car in a NY garage, they'd go after you.


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## Roadsterwench (Sep 21, 2002)

Yes, you usually need to keep the car in the tax-free state a certain amount of time, then register it in your own state -- and they say storage doesn't count, etc., etc. They really want that tax from you.

In some states, when you trade in a car, the tax on the value of the trade-in is deducted from the tax on the value of the new car -- but not in California, of course.


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## Michael330 (Apr 23, 2002)

*Re: Re: Can you buy a new car without paying tax?*



beewang said:


> *
> 
> :lmao: :lmao: :lmao:
> 
> ...


Europe deals with this whole problem of "consumption line" as you put it in a much clearer way by means of a Value Added Tax instead of sales tax.


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