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Am I going to get screwed on Taxes/incentives?

I live in New Jersey. Here, there is no sales tax on electric vehicles. My model S is scheduled for delivery in December. So I should expect to pay no sales tax.

Now here's the catch…

We are going to be moving (sometime in the first or second quarter of 2014) to California. California requires that any car less than a year-old pay "use tax" which coincidentally is the same amount as their sales tax less what you paid in NJ. That means, I lose any benefit to buying the car in New Jersey.

My question, do I then qualify for California is $2500 EV incentive? It seems unfair that I would lose out on both states incentives just because of a timing issue.

I tried calling the motor vehicle people in California and, after waiting for them to call me back, spoke to one of the rudest individuals I have ever had the pleasure of talking to, who was not only unhelpful but also sarcastic and uncooperative. I think they must breed these people special or something. Normal human beings aren't generally that obnoxious.

Anyone know the best way to handle this? Is there a way to get the $2500 credit even if I take delivery in New Jersey? Anyway to minimize the tax burden (legally of course)?

Jeff - The CA DMV does not handle the $2500 CVRP rebate. It's handled by these guys: http://energycenter.org/clean-vehicle-rebate-project/tesla-model-s-requi... I think the hitch in your case is the rebate must be applied for within 6 months of purchase, and you have to be a CA resident at the time of application. Is your move to CA permanent, to where you would be required to register your car in
CA?

Can you wait and buy it when you get to Cali?

Don't move. Don't buy the car. Quit griping.

Well, you could establish CA residency, take delivery here, then pay CA sales tax and qualify for the rebate. If you are moving to CA anyway, that seems workable and legit, but it will complicate you tax fillings for this year since you will need to file for CA and NJ tax returns--although you would have that problem next year anyway--not a CPA so check with your tax preparer for all the implications of doing this.

BTW, its the Board of Equalization that collects the use fee, not the DMV. Among other things, its basically there to stop folks form trying to avoid paying sales tax on big ticket items, which is not what you are trying to do. You could try talking to them directly to see if you can get an exception of some sort: http://www.boe.ca.gov/info/contact.htm

O

I will definitely be there before July (six months after I take delivery) so applying for the credit sounds like it won't be a problem. My wife will probably be moving in November. Of course, she's not taking the Tesla with her (over my dead body?)

As to talking to the board of equalization, I will check with them on Monday morning.

@lcaudle, thanks but no thanks
Thanks for all the info guys!

I believe the first time the car gets registered, it must be in CA to be eligible for the rebate: http://energycenter.org/clean-vehicle-rebate-project/faq#application5

However, if your better half is going to be in CA in November, then have her do the CA registration. You might want to check with Tesla to see if they can do a virtual delivery in CA to your wife then do the physical delivery to you in NJ.

O

Getting both, the $2500 credit and tax exemption might be tough.
So wouldn't it be much wiser to take the tax savings in NJ (you'd pay about $9k - 10k in sales tax in CA, depending on the model you get) and forget about the $2.5k credit? You have some grace period before registering the car in CA anyway, so I'd wait until the car is a year old and then register it (assuming you're correct and they wouldn't charge you anything beyond the regular registration fees after a year). I don't know if that's strictly by the book, but I've seen people drive around with out-of-state plates for years, so if you need to bridge only six months, I think you should be OK.

You could always store the car in New Jersey for a few months, but that would be painful.

Depending on when I move, it could be almost a year! Also, the company will only move the vehicles within a year of her start date and that is the beginning of November (a month before it will arrive).

I just think it unreasonable to charge use tax if I've had it registered for a few months here first (after all, I ordered it before she got the job offer). I didn't buy it here to save taxes.

I like DiegoPasadena's idea best.

Or you could just wait until you have been a Cali resident for a few months to take delivery. you pay sales tax but get the $2500 rebate.

DiegoPasadena +1

Short answer: Yes, you are going to get screwed.

@jeffsstuff,

Leave your New Jersey plates on the car after you move to CA. If you get pulled over, just claim to be rich and say you have multiple homes in both states.

After the car is over 1 year old, then do all of the paperwork to get a California license plate.

My parents have homes in Idaho and Florida. They regularly have their cars in the wrong state. Nobody cares.

@JamesM:

I am not sure you can get auto insurance that way.

O

+1 JamesM.

Just keep your NJ insurance going on the Model S and other cars until 1 year passes and hope you don't get in an accident. Otherwise you will likely get screwed w/ use tax and no rebate.

NJ insurance are purchased 12 months at a time. The insurance coverage is still in effect even if you drive from NJ to Alaska.

There no law against people driving cross country with their insurance from the home state.

It would be perfect for the OP to register with CA when his insurance runs out at the 12 months mark. Just expedite your MS order and get it ASAP or buy a loaner out right already.

No, there is no law against driving cross country, but usually you need to demonstrate residency in the state you using for insurance purposes, otherwise we would all be buying auto insurance in Wyoming or North Dakota.

If you claim the car is garaged in NJ but the claims adjuster and all the paperwork is being sent to CA, its gong to raise some awkward questions.

Hey, if you can get away with gaming the system, good for you, just be aware of risks.

O

You cannot (legally) wait a year before registering your car, most states require you to register your car 30-90 days after relocating.

Will you get caught or punished?

Unlikely, but you would be breaking the law.

No, l'm not waiting a year to register and I'm not going to "game the system". My intention was to find a legal way to get one or both of these rebates. Clearly this is impossible.

What would've been nice would be to have the car registered in California but delivered to me in New Jersey (I don't believe they can do that). If they could, I would at least get the California rebate because the car would be registered there initially.

While I look forward to my model S (just got the Vin number yesterday) and the move to the West Coast, my one conversation with the DMV out there left me wondering if it is even less efficient / friendly then the one here in New Jersey (something I never would've thought possible)!


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