Courtesy Delivery and Taxes (Illinois->California)

7665 Views 35 Replies 19 Participants Last post by regguy1, Feb 16, 2015

jgraessley

Discussion Starter · Dec 23, 2014

I had the good fortune of finding a Z06 allocation at a dealership in Illinois (Castle Chevrolet). So far the experience has been stellar. Not wanting to drive the car from Illinois to California this time of year, the dealership kindly offered to resort to a courtesy delivery as long as I could find a dealership in CA willing to perform the courtesy delivery.

I had gone first to Abel Chevrolet in Rio Vista as they seem to be the place for Corvettes and everyone I've encountered has nothing but good things to say about them. Abel didn't have an allocation but they were willing to handle the courtesy delivery. Excellent.

The car was built on Dec 19th. Now we're trying to coordinate the delivery. There seems to be some confusion about paying state sales taxes. According to the Illinois dealership, they are legally required to collect taxes (6.25% per Illinois document ST-85 - Reciprocal - Non-Reciprocal Vehicle Tax Rate Chart July 2014). According to CA DMV <https://www.dmv.ca.gov/portal/dmv/?1dmy&urile=wcm

ath:/dmv_content_en/dmv/pubs/reg_hdbk/ch6/ch6_14> "... the California dealer must collect California sales tax."

Has anyone else been through this? Any tips?

The two dealerships have been fantastic so far and I would highly recommend both of them.

Thanks.

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BOBSZO6

· #2 · Dec 23, 2014

I asked my dealer, Kerbeck (NJ) about this and they actually have an office in CA so that they then do the entire sale, including registration, license, sales tax. The courtesy delivery dealer does nothing.

Reactions: 1

Kathoga

· #3 · Dec 23, 2014

Probably different for CA... but in WA, for my courtesy delivery from MacMulkin I paid WA State sales tax (out of pocket) after the car arrived: Pay to the order of Washington State Department of Licensing in order top get my plates. was approx. 7K.

Reactions: 1

tmcternan

· #4 · Dec 23, 2014 (Edited)

jgraessley said:
I had the good fortune of finding a Z06 allocation at a dealership in Illinois (Castle Chevrolet). So far the experience has been stellar. Not wanting to drive the car from Illinois to California this time of year, the dealership kindly offered to resort to a courtesy delivery as long as I could find a dealership in CA willing to perform the courtesy delivery.

I had gone first to Abel Chevrolet in Rio Vista as they seem to be the place for Corvettes and everyone I've encountered has nothing but good things to say about them. Abel didn't have an allocation but they were willing to handle the courtesy delivery. Excellent.

The car was built on Dec 19th. Now we're trying to coordinate the delivery. There seems to be some confusion about paying state sales taxes. According to the Illinois dealership, they are legally required to collect taxes (6.25% per Illinois document ST-85 - Reciprocal - Non-Reciprocal Vehicle Tax Rate Chart July 2014). According to CA DMV <https://www.dmv.ca.gov/portal/dmv/?1dmy&urile=wcmath:/dmv_content_en/dmv/pubs/reg_hdbk/ch6/ch6_14> "... the California dealer must collect California sales tax."

Has anyone else been through this? Any tips?

The two dealerships have been fantastic so far and I would highly recommend both of them.

Thanks.

I discussed this with Mike Furman recently and apparently the selling dealership is required by GM to collect the sales tax at the time of sale. The reason for this is to curtail out of country sales. The subject of collecting sales taxes may vary from one dealership to another and state laws may vary as well. In California each county of residence has it's own sales tax rate. You can go on line to the California State Board of Equalization and find out your respective sales tax rate by your address. The rate you pay is in accordance with the rate for where you reside. The dealership selling you the vehicle is responsible for forwarding the taxes you paid on the vehicle to the appropriate state agency. As far as license/registration fees are concerned, I'm anticipating paying those to either the courtesy delivery dealer, if they will be kind enough to take care of it for me, or deal with DMV myself, which I've done many times in the past. That's fairly painless except for the wait until your number comes up. PM me if you have any additional questions. Tom McTernan

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CaptV1VR

· #5 · Dec 24, 2014

Had my Z51 from MacMulkin delivered my courtesy dealer in Auburn a month ago and I paid sales tax and DMV fees along with my courtesy fee to the dealer in Auburn. No fees were collected for those items from MacMulkin. I believe Abel should know that as they have had more than one of these transactions?

freeman1215

· #6 · Dec 24, 2014

Appreciate this informative thread! I ordered my car through MacMulkin also and plan on discussing all these "details" with my local Southern California Courtesy Delivery dealer Rotolo next week.

Until then, I am under the opinion that I do not want to pay anything (besides the initial deposit already paid) on my car before I and the local dealer, throughly inspects the car. Anyone with actual experience here?

jgraessley

Discussion Starter · #7 · Dec 24, 2014

I heard back and there is now agreement. Illinois is "special". Illinois requires the selling dealership in Illinois to charge 6.25% tax. This will complicate the DMV paperwork but we will find some way to work through it. I'll follow up when it arrives and we work through the details.

Thank you all for the advice and suggestions.

Reactions: 1

ICU LQQKIN

· #8 · Dec 24, 2014

When your car arrives in CA and you accept it, you will take all your paperwork to the DMV. They will take your sales contract showing the tax already paid and adjust your tax liability you will need to pay the State of CA. I did this last year when I took delivery of my Z51. Hardest part was standing in line at the DMV. If you know in advance exactly when your car will arrive, make an appointment at your local DMV.

Reactions: 4

tmcternan

· #9 · Dec 24, 2014

ICU LOOKIN great advice. The way I have been led to understand, MacMulkin is the only major dealer that doesn't collect the sales tax at the time of sale. But regardless, I too am anticipating having to deal directly with the California DMV with the license/registration. Your advise regarding making an appointment is excellent. Noticed the DMV office where I go in the small town of Folsom, California has made attempts to make any visits as painless as possible with a large seating area while you have to wait. No more passing out standing in line.... Already have personalized plates for the Z06 waiting there for me.

ALF01

· #10 · Dec 24, 2014

tmcternan said:
ICU LOOKIN great advice. The way I have been led to understand, MacMulkin is the only major dealer that doesn't collect the sales tax at the time of sale. But regardless, I too am anticipating having to deal directly with the California DMV with the license/registration. Your advise regarding making an appointment is excellent. Noticed the DMV office where I go in the small town of Folsom, California has made attempts to make any visits as painless as possible with a large seating area while you have to wait. No more passing out standing in line.... Already have personalized plates for the Z06 waiting there for me.

Unless it's has changed since I lived there (New Hampshire - where MacMulkin located), there is no sales tax applicable in NH...possibly one reason MacMulkin doesn't collect it.....

Ret9580

· #11 · Dec 24, 2014

ICU LQQKIN said:
When your car arrives in CA and you accept it, you will take all your paperwork to the DMV. They will take your sales contract showing the tax already paid and adjust your tax liability you will need to pay the State of CA. I did this last year when I took delivery of my Z51. Hardest part was standing in line at the DMV. If you know in advance exactly when your car will arrive, make an appointment at your local DMV.

Or be a member of AAA and avoid DMV altogether

Reactions: 1

Mike [email protected]

· #12 · Dec 24, 2014

I collect your (buyers) State Sales tax only. GM requires dealerships to do this so that NEW GM vehicles do not get exported without sales tax being paid.

Mike Furman
Criswell Chevrolet

Reactions: 2

tmcternan

· #13 · Dec 24, 2014

ALF01 said:
Unless it's has changed since I lived there (New Hampshire - where MacMulkin located), there is no sales tax applicable in NH...possibly one reason MacMulkin doesn't collect it.....

That makes sense ALF01. Understand Oregon doesn't have sales tax as well. That's the way it should be seeing as how the money the purchaser is buying their new car with has already been taxed as income.....

rdslon01

· #14 · Dec 24, 2014 (Edited)

ICU LQQKIN said:
When your car arrives in CA and you accept it, you will take all your paperwork to the DMV. They will take your sales contract showing the tax already paid and adjust your tax liability you will need to pay the State of CA. I did this last year when I took delivery of my Z51. Hardest part was standing in line at the DMV. If you know in advance exactly when your car will arrive, make an appointment at your local DMV.

This ^ is what I have heard. Also, the "adjustment", if I understand correctly, is a dollar-for-dollar credit.

For example, let's say you live in a city in CA which has 9% sales tax. Let us further assume (for simplicity of calculation) that the car is $100,000. In that case, you would owe a total of $9,000 in taxes.

Apparently Illinois will collect 6.5% of that, or $6,500.

If I understand correctly, when you go to the CA DMV the total taxes would be $9,000 (or whatever it is based on the purchase price times the sales tax rate for your county/city). You would have already paid $6,500, so the extra you would pay to the DMV would be $9,000-$6,500=$2,500.

I think that is how it works.

mjw930

· #15 · Dec 25, 2014

Courtesy Delivery and Taxes (Illinois->California)

Here's the Illinois form the dealer will use to determine whether tax is to be collected and how much.

http://tax.illinois.gov/Publications/Sales/rntrrc/ST-58.pdf

Basically there is a nationwide sales tax reciprocity with the exception of 2 states ( not sure which two ). Each state will collect either their local tax or the tax of the destination state, whichever is lower.

When you get to your home state you either pay the additional tax due or no tax at all.

Milliwatt Rob

· #16 · Dec 25, 2014 (Edited)

I have no idea what happens with a courtesy delivery. But I am a Vermont resident, purchased my car at MacMulkin, and registered it in Vermont. It is correct that New Hampshire has no sales tax. MacMulkin did not collect any Vermont sales tax from me. MacMulkin gave me the car's "GM Certificate of Origin". When I registered the car in Vermont, I presented the GM Certificate of Origin and my MacMulkin sales receipt, and I paid the Vermont sales tax to the Vermont DMV directly. based on the sales price on my MacMulkin receipt. And Vermont then sends me my Vermont Title of Ownership.

It seems to me that the party that applies to the State for your title is the party responsible for paying the sales tax to the State. So if the courtesy delivery includes getting you a state title, then you pay them the sales tax so they may forward it to the State. If you go to the DMV yourself to apply for a title with a GM Certificate of Origin, then you would directly pay the sales tax yourself to the DMV.

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racezx9

· #17 · Dec 25, 2014

Mike, another question, what does the courtesy dealer do when they receive the car? Do they do all the normal dealer prep for the car and deal with any warranty issues if there are any as if they are the selling dealer ?

mjw930

· #18 · Dec 25, 2014

Milliwatt Rob said:
I have no idea what happens with a courtesy delivery. But I am a Vermont resident, purchased my car at MacMulkin, and registered it in Vermont. It is correct that New Hampshire has no sales tax. MacMulkin did not collect any Vermont sales tax from me. MacMulkin gave me the car's "GM Certificate of Origin". When I registered the car in Vermont, I presented the GM Certificate of Origin and my MacMulkin sales receipt, and I paid the Vermont sales tax to the Vermont DMV directly. based on the sales price on my MacMulkin receipt. And Vermont then sends me my Vermont Title of Ownership.

It seems to me that the party that applies to the State for your title is the party responsible for paying the sales tax to the State. So if the courtesy delivery includes getting you a state title, then you pay them the sales tax so they may forward it to the State. If you go to the DMV yourself to apply for a title with a GM Certificate of Origin, then you would directly pay the sales tax yourself to the DMV.

No, it doesn't work that way. Your experience is tainted because NH has no sales or use tax. so MacMulkin never collects taxes on any sale. With the sales and use tax reciprocity agreements between the states each state collects the taxes and the buyer's state credits you for taxes paid to the selling dealer's state. The selling dealer will collect and remit to their state the local tax or the buyers state tax, whichever is lower. This doesn't apply to all states, mostly just the states that require a car DEALER to collect taxes even though the car is being delivered to an out of state buyer.

These are state laws, not edicts from GM. GM cannot regulate how a franchise dealer collects sales and use tax, that is regulated by the states. Mike, I'm 99% sure it's the state that requires you to collect the Excise tax, not GM but regardless, you must collect it. What would be interesting to know, since I can't find it online is what if the state the car is being sold to doesn't have a sales tax or their tax is lower than 6%? I know if I'm buying from a Michigan dealer they only charge what the buyers state charges as per Michigan tax law.

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ICU LQQKIN

· #19 · Dec 25, 2014

If the car is purchased and paid for out of California, AAA will not register the car for you. It has to be taken to the DMV for a mandatory inspection. Also, you have to get a smog check prior to going to the DMV. Even-though it is a brand new car and has the proper emission control ratings, California DMV required me to get the smog check. I had to go through all this with my Z51 that I purchased in AZ.

tmcternan

· #20 · Dec 25, 2014

Did you buy your car new or used ICU LOOKIN? I'll find out soon enough, but if the "New" box is checked on your sales contract, I'm kinda puzzled why DMV would require a SMOG check? I've run into issues with CA DMV requiring different things based on whoever helps you there. Can change from one employee to the next..... If they require me to get a smog check, then I guess I'll go get a SMOG check. I know I've had to do that with used vehicles, even ones that were one year old with only 9000 miles on the odometer.

In respect to the sales tax issue, I could be wrong here, but I've gotten the impression the selling dealership, which in my case is located in Maryland and Maryland has a 6% sales tax rate, however the tax rate where I live in California is at 7 1/2%. It's my understanding the dealership in Maryland will go ahead and collect the sales tax for me at the rate of 7 1/2% from where I live. Will have to double check that next week, but I believe the selling dealership checks the different rates when shipping all over the country...

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