CA-specific 'paperwork'

[ralph]

 

If you've dealt (or are dealing) with registering a Caterham in California, read on...

 

(I'm dropping this in build threads since that's where it's likely to reach folks who may have opinions on it and/or might benefit from being aware of it -- not technically a build thing...more a bureaucratic thing.)

 

Just got notice from the State of California (CDTFA) requesting that I pay use tax (with a year's worth of interest).  They had reached out a couple months after my crates arrived, and I had explained (I thought successfully) to the agent that the reason I wasn't paying use tax as part of the import process was that I would be paying it upon registering with the DMV.  In this second notice, the situation is characterized as my "claim for exemption has been denied"...which I think is a bit off from the actual situation -- I'm not claiming an exemption per se, but rather pointing out that I have in fact payed use tax, and would prefer to not have to pay it twice.  I've sent them all relevant paperwork (though the DMV record of 'fees paid' doesn't specifically mention "use tax"), and am waiting on a reply.  I'm guessing that with such a low volume of the particular scenario (sb100/SPCNS) involved, the CDTFA folks are confused by it, and just see someone importing car parts (which would be subject to use tax at the time of import).

 

Has anyone gone through this contention as part of registering their Caterham in CA?...any suggestions?

 

[KnifeySpoony]

TBH I don't even know what "use tax" even means. At my first DMV visit I paid usual CA sales tax, then standard reg fees when I actually registered after BAR approval. No other taxes were requested. 

[toldfield]

My experience is that Use Tax is collected for purchases where you don't pay sales tax, for instance an out of state purchase.  There are ways around it but they involve taking delivery out of state and not bringing it into the state for a specific period of time.  

[Croc]

 

 

Correct - use tax is assessed when something otherwise avoids CA sales tax e.g. out of state purchases.  7.25% rate plus any local taxes based on your CA location - usual all-in rate for most people is 7.5%. 

 

The CA DMV website never talks about a CA sales tax on vehicles - they always reference use tax.  Look at Chapter 4 of the California Vehicle Industry Registration Procedures Manual.  Whatever you pay in use tax to the CDTFA is interchangeable with use tax paid to the DMV.

 

If you did not pay the use tax in time at the DMV then you are supposed to pay use tax via CDTFA.  In the past I recall some CA owners noting on USA7s they paid use tax penalties when went to CA DMV to start the registration process.   I could not find the old post to surface it for you but I will keep looking.  The penalty was for the delay between kit import to CA and rocking up at the DMV to pay the bill.  Given owners have to present receipts of items purchased as part of this process, its easy for the tax authorities to go back and calculate penalties.  The lack of consistency in application to CA owners is likely based on inconsistency of DMV personnel knowledge of the CA special vehicle process.

 

I suspect your "import" paperwork to CA had something that triggered in the CDTFA systems routing you to use tax to be done through CDTFA instead of DMV. 

 

The guide I used for my purchase and exemption claim (non-seven vehicle) was here:

https://www.cdtfa.ca.gov/industry/vehicles-vessels-aircraft-guide.htm#Overview

 

There is no use tax exemption for an unassembled kit or an assembled kit vehicle.  An unassembled kit vehicle is defined as a vehicle in CA. 

https://www.dmv.ca.gov/portal/handbook/vehicle-industry-registration-procedures-manual-2/use-tax/transactions-not-subject-to-use-tax/

 

Your original post is ambiguous as you state you paid use tax but then say you would prefer to pay it at the DMV - apologies if I misread it.  If you paid use tax at the DMV then you present evidence of payment to the CDTFA folks and claim a use tax credit.  If you have not paid it at the DMV then you will be paying via CDTFA direct.  Why?   You are getting 10% penalty interest on your use tax debt so you need to stop the clock with a payment now otherwise it gets awfully expensive real quick.  If you pay CDTFA direct then you keep your evidence of use tax paid so that when you go to the DMV later the DMV do not charge you twice. 

 

If you paid sales or use tax in another state then you are entitled to also get a credit for this when determining CA use tax.

 

The CA taxes are draconian in their application but I have always found the CA tax people to be reasonable to work with if you are trying to understand a process - maybe give them a call to confirm that you will get full credit for use tax so you only pay once?

 

 

[ralph]

I paid use tax in full (~$5200) at the DMV shortly after completing the build (approx. 6-7mo after receiving the crates).  If the CDTFA wants to charge me interest on the 6-7mo delay, I have no quarrel with that, and will happily pay it.  What they are asking me to do is pay tax I've already paid (plus a year's interest), which is not right, IMO.

[KnifeySpoony]

Yeah that should seem pretty straightforward. Seems like the use tax is at some rate similar to sales tax?