Car Purchase Sales Tax - Register Under Another Owned Property Possible?

[Spiffster]

Hey fellas! Been a while. Quick question. I own a few rentals very close to where I live. Can I purchase a car under one of my rental addresses where sales tax is 3.5%(!) lower? Not trying to cheat any system, I own the other properties and pay (exorbitantly high) property tax for each. This would reduce the purchase price around $1500. TIA

[ua_guy]

You're going to want to consult an attorney, and the DMV on this one. Each state has their own directive, but, in general, the purchase address for the car is the same one you use to register the car with the state, and pay tax on it, which in theory should be your primary residence, as well as where you tell your insurance company where "home" is, and the address to which your driver's license is issued. Even though you own the rentals, they are not likely your primary residence or where you're keeping the car. It's one thing to get away with it, and it's another when an auditor or insurance company finds out you're doing something not quite kosher. My answer is: I don't know, but, I don't think I'd take the internet's advice here. I'd want to make darn sure I was right.

[disneysteve]

I agree with ua_guy. Can you do it? Sure. Should you do it? Probably not. What you're describing most likely constitutes insurance fraud. You may never get caught, but if you ever have to file a claim and the insurance company investigates and discovers what you did, they could deny the claim and probably drop your coverage.

[bjl584]

When I was younger a lot of people used to set up a PO box in Ohio and buy and register their cars there as opposed to my home state of Pennsylvania. Less in sales tax, cheaper insurance, and no inspections or emissions.
PA wised up to this and started requiring a physical address for vehicle registrations.

There might be a way for you to do what you want, but if you get caught the fines and penalties would probably outweigh the benefits.

[disneysteve]

When I was younger a lot of people used to set up a PO box in Ohio and buy and register their cars there as opposed to my home state of Pennsylvania.

Same here. I grew up in Philadelphia and people would register their car using the address of a relative who lived in New Jersey since the insurance was much lower.

[kork13]

I have a fair amount of family in Oregon (no sales tax) ... So multiple people in my family (myself included) have purchased/registered cars there to avoid sales taxes. Our cars are currently registered in Alaska for similar reasons (among others).

If you have a legitimate claim to registering in the other state, especially if you register it as an asset of the rental business (some states title "fleet vehicles" differently), I see no problems, at least ethically. The lawyers could parse it either way, but you own a physical property in the state -- seems legit to me.

[ua_guy]

It's basically tax evasion, and a lot of people don't get caught. You don't get a discount on sales tax for purchasing a car just because you pay high property tax. That's not how it works, and people magically think they're above the law when it comes to those things sometimes. If you register a car with your "home rental business" and aren't claiming the ~90% of miles you put on it for personal use, that's skirting the law too, for example. Many states specifically state you are required to register your vehicle at your primary residence, where you spend the most days per year. I don't see how ignoring an established law like that is "ethical".

[myrdale]

My old truck was in my father's name in Alabama, while I was working and living in Georgia with a Georgia drivers license. I got stopped at a road block and the officer was not happy that I had an Alabama tag. I told him I was borrowing the truck. He wasn't any happier.

Now in Georgia, when you purchase a new vehicle they hit you with a ridiculous sales tax under the guises that your annual renewals will be less (they aren't). If you buy the vehicle out of state, you still have to pay the Georgia sales tax to get tags.

[disneysteve]

My old truck was in my father's name in Alabama, while I was working and living in Georgia with a Georgia drivers license. I got stopped at a road block and the officer was not happy that I had an Alabama tag. I told him I was borrowing the truck. He wasn't any happier..

Of course he wasn’t happy. What you were doing was illegal.

[myrdale]

What you were doing was illegal.

Naw... I 2005 and I was borrowing his 2002 Frontier while he borrowed my 1990 Chevy. Insurance never seemed to mind, and auto loan wasn't quite paid off yet.

Shady..... well.. I won't comment on that.

[disneysteve]

Naw... I 2005 and I was borrowing his 2002 Frontier while he borrowed my 1990 Chevy. Insurance never seemed to mind

They might have minded had you been involved in an accident and they investigated.

[LivingAlmostLarge]

They might have minded had you been involved in an accident and they investigated.

Insurance companies will try to get out of paying for anything by any way or means. They would have been like hmmm.... that more than illegal because they would have been like well how can we NOT pay out.