Tips on Buying Cars: Purchasing a Car, confessions of a former car salesman, department of motor vehicles

Question
Do you know if you buy a car out-of-state, if you have to pay the taxes in their state and yours?
Thanks
Alison

Answer
Hi Alison,

Thanks for your question about which state you pay taxes in for vehicles purchased out of state.

My answers is--it depends. Hate to do this to you, but the best I can find out is, no surprise, it depends on the state you purchase from, and live in.

I was able to confirm that, in Texas, the sales tax is ultimately paid to Texas, who knows about it when the vehicle is registered. You either have to show that it's been paid in the state of purchase via your sales receipt, or pay it yourself. In the former, the dealership will have to submit it to Texas; in the latter where, for example the vehicle was purchased from a private seller, you would be on the hook for it.

I believe CA follows this rule, but OR may not. I recommend you check with your states department of motor vehicles to confirm for your specific situation.

I started to put this information in one of the early drafts of my book, $ave Thousand$ Buying Your Next Car: Confessions of a Former Car Salesman (www.Make-Me-Smarter.com), but I couldn't keep track of the individual requirements of all 50 states so deleted it from the final version.

Happy Holidays, Alison!


Ron