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» From: New Haven, CT Dear TaxMama, Is there any way I can buy a car in a state that doesn't charge sales tax and register it in another? I've heard of Massachusetts residents being unsuccessful trying to buy in New Hampshire. Do other states come after you for the tax upon registration? Why is this different for small items? Ed Dear Jeff, LOL! That reminds me, back in the dark ages, when I was very, very young and used to dispatch police tow....the cops used to hang around my office sharing their wisdom. These LAPD cops used to register their cars in Arizona because registration was cheaper. But your question is different. You want to buy a car in one state without sales tax. Then register it in your own state. Perhaps you can. Perhaps not. It depends on how your state handles reporting. I'm not really sure of the answer, particularly since you don't specify which two states? First of all, when you buy the car, generally, the dealer must register it in the state where it is sold - if you're going to be driving in that state... Each state has different laws with respect to sales taxes and auto registrations. Although, I suppose you could always arrange to have the car delivered to your state. So instead of paying for two registrations, you'd pay for the cost of delivery. But your real question is, I believe, can you get away without sales tax altogether? Not sure. Why? Because most states also have a 'use tax.' This is specifically for things that were either bought out of state or bought wholesale - that should normally be taxed in the state. Since you must register it with a government agency, there may be a good chance, that the agencies provide some sort of cross- reference (especially if this is a common practice). Louisiana, for instance, has added this 'use tax' line to the front page of their income tax return to encourage voluntary reporting. Find out from your local department of motor vehicle registration if they do. Oh yes, and even if you can get away with it now...that will be changing as more states become a part of a new interstate program. This is designed to address Internet sales. But, you can just bet if it is successful, the states will require offline merchants to log in and use for sales across state lines. Best Wishes, Eva Rosenberg Click Here for TaxMama's Honor System |
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