Question about sales tax for out of state lease (Volvo)

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1

I’m in the last steps on getting a lease deal on a Volvo shipped from CA → OR. The dealer sent me the lease agreement and it is showing the monthly sales/use tax as 10.25% for California, but the sales tax where I live in Oregon is 0%. I’m being told that it’s just for the first month and it will adjust for the second payment and beyond but I wanted to make sure that this is standard practice as I don’t want to sign the lease agreement and end up paying an extra 10.25% over the life of the lease.

Any advice is appreciated!

2

Taxes are based on where the buyer registers the car, not where the car is sold.

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That was also my understanding as well. Since they are going to be taking care of registering in OR shouldn’t the lease agreement should show my local tax rather than the tax where the car is sold or does it not matter?

4

It should, yes. You may have exceeded the computational skills of your salesperson, but your lease agreement (when you sign) should be based on OR.

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5

No, in California it will not. Required to pay CA taxes on the first month unless you tow the car to the state border.

Also after that first month, taxes are based not on where car is registered but on the garaging address that one gives Volvo. Now of course 99.99% of the time it’ll be the same state, but it doesn’t have to be. I used to have a Florida registered car garaged in California, so paid CA taxes on the monthly.

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Ahh interesting is this a Volvo quirk? Thanks for the info. I had a bmw shipped from California and didn’t deal with this.

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No it’s the law in California. Nothing to do with Volvo. If the car is driven in California by the purchaser you must pay California sales tax. That’s for the first month on the lease or the total purchase on a purchase/finance.

If it’s shipped to you AND the shipper doesn’t drive it in state (eg the dealer puts it on a truck as opposed to a salesmen drives it across the border) then you don’t owe CA tax.

Blockquote

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Thanks that’s super helpful. My BMW was second case for sure so it showed no tax. I’m not going to CA and it’s being shipped to me so I’m not sure if they’re just charging the tax to cover their bases while shipping is set up. Just glad to get a better understanding that once it’s in my garage address in OR I should be set at 0% tax

9

So if the the tow truck picks it up at the dealer then no tax.

But even if they have to drive it from the lot to another place a few miles down the road to meet up with the tow truck, you owe tax.m

Driven on public roads is the litmus test and it doesn’t matter who the driver is (it doesn’t have to be you).

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OP, do post back. Interested to hear about your deal and registering experience.

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