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      04-13-2016, 02:25 PM   #1
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Buying from a state with no sales tax

This would be my first new car purchase and I'm not privy to all the ins and outs of how taxes would work. I plan on doing ED for my M2 purchase so can order from any dealership. My question is, if I purchase through a dealer in a state without sales tax (Montana, Deleware, ect.) would I still have to pay for taxes after I register my car in my state? Sorry if this is a stupid question. Thanks!
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      04-13-2016, 02:37 PM   #2
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Quote:
Originally Posted by synergist View Post
This would be my first new car purchase and I'm not privy to all the ins and outs of how taxes would work. I plan on doing ED for my M2 purchase so can order from any dealership. My question is, if I purchase through a dealer in a state without sales tax (Montana, Deleware, ect.) would I still have to pay for taxes after I register my car in my state? Sorry if this is a stupid question. Thanks!
AFAIK, Yes. When you register the car you'll be required to pay the applicable taxes.
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      04-13-2016, 02:56 PM   #3
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Unless you live in a state with no sales tax this won't help you at all. Doesn't matter where you buy the car, matters where you register it.
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      04-13-2016, 02:59 PM   #4
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I live in Ohio and the answer is yes. u pay tax where it's titled, however some states have a lesser tax burden or zero, but you have to pay way more each year when you get your plates based on what the car is worth
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      04-13-2016, 04:57 PM   #5
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Quote:
Originally Posted by Francis///M View Post
AFAIK, Yes. When you register the car you'll be required to pay the applicable taxes.
So how would this work if I bought from another state with tax? I would have to pay taxes at the time of purchase and when I register it?
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      04-13-2016, 05:08 PM   #6
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Originally Posted by synergist View Post
So how would this work if I bought from another state with tax? I would have to pay taxes at the time of purchase and when I register it?
No, you should only pay taxes based on where it gets registered.
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      04-13-2016, 07:35 PM   #7
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your contract should reflect YOUR registered state sales tax.

For example in Michigan - tax is factored into the lease deal per month at a rate of 6%.
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      04-13-2016, 09:46 PM   #8
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In Arizona you either pay sales tax where you buy the car or you pay when you register the car in AZ. Upon doing that you have to show proof you paid sales tax. The only exception is private party sales which are not taxed in AZ. The good news is if you buy an out of state car you only have to pay the 6.6 base tax rate, your not subject to county or city use taxes that you would be subject to if you bought from any of the instate dealers. I am buying my car from a dealer in San Diego so I did quite a bit of research on this.
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      04-13-2016, 09:48 PM   #9
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Feel free to PM me with any questions. AZ has some unique practices so folks from other states might not be aware.
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      04-13-2016, 10:53 PM   #10
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Quote:
Originally Posted by pruettfan View Post
In Arizona you either pay sales tax where you buy the car or you pay when you register the car in AZ. Upon doing that you have to show proof you paid sales tax. The only exception is private party sales which are not taxed in AZ. The good news is if you buy an out of state car you only have to pay the 6.6 base tax rate, your not subject to county or city use taxes that you would be subject to if you bought from any of the instate dealers. I am buying my car from a dealer in San Diego so I did quite a bit of research on this.
Good to know. Thanks for the info. I know all about the no tax for private sales, I have taken advantage of that for my last 7 cars So say I buy from a state with lower sales tax(such as CO) would that suffice for the taxes or would I have to pay the difference up to 6.6?
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      04-14-2016, 07:52 AM   #11
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Also have to pay tax sometimes after the fact - say you live in PA and register the car there then move to IL and register the car there. Forget the cutoff but if the car is under however many months old (maybe a year) you have to true up the taxes. So if IL is 3% higher than PA you pay the 3% to IL when you register the car.

You can get REALLY screwed if you lease and do that bc most places only pay tax on portion you use but IL for example pay tax on entire purchase price. I know all this bc I leased a Touareg in NY then moved to IL a few months later and to go get my car registered was a LOT of money. Bastards make you take a written exam to transfer your license too.
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      04-14-2016, 01:27 PM   #12
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You could register it in Montana and run Montana plates for no tax. Some states frown upon that though.
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      04-14-2016, 04:17 PM   #13
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Quote:
Originally Posted by synergist View Post
Good to know. Thanks for the info. I know all about the no tax for private sales, I have taken advantage of that for my last 7 cars So say I buy from a state with lower sales tax(such as CO) would that suffice for the taxes or would I have to pay the difference up to 6.6?
Correct, as long as you have paid at least 6.6% your good with AZ.
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      04-14-2016, 04:20 PM   #14
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Quote:
Originally Posted by CosmosMpower View Post
You could register it in Montana and run Montana plates for no tax. Some states frown upon that though.
AZ won't do that. They will make you pay sales tax upon registering because they will look at the State your were a resident. AZ has that one pretty well covered. I looked at all of the angles. The best is probably to buy the car and have it shipped and pay the 6.6%. The rate in San Diego is 8%, the cost of shipping the car is more than the savings I would gain so I am just going to fly in grab my car, pay sales tax in San Diego, drive the coast for a day or two and head home. I will still have to pay licensing fees in AZ which I am guessing will be around 1k.
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