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Buying car in canada/"avoiding" taxes

Buying car in canada/"avoiding" taxes

Old Oct 11th 2002, 8:44 am
  #1  
Bob
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Default Buying car in canada/"avoiding" taxes

It has came to light that used cars in Alberta have no tax whatsoever.
So I'm thinking about buying a car then importing it into the US to
California. I know the car is the same model and I can get the letter
from the manuf for EPA emissions. Since the car is like 60k US then
the tax of 10% is significant.

Things I know:
1) If I buy a car and import it with nothing else happening, CA
charges use tax (~10%) if I import it within 90 days of the sale date
2) Alberta has no sales tax at all on used cars
3) I can get the letter need for the EPA (same car model anyway)

Things I could do:
4) Declare car as personal effects, drive back to CA. Register it and
show my customs paperwork.
5) "Back date" the bill of sale so it looks more than 90 days.
Probably not a problem since you fill it out yourself/private owner.
6) Get Alberta plates/registration but CA insurance (Alberta insurance
probably wouldn't pay if you got into an accident since it's always in
CA). It seems insurance does not depend on registration. i.e. I can
buy a car and insure it with just the VIN without having had
registered it yet. Drive around for the 90 days in CA before really
registering it. I can do this since students out of state aren't
required to register their cars in CA while they are studying here
(not considered residents).
4) Get it registered under my name and give it to someone else to
drive around in it for 90 days.

Things I'm not sure about and would like answers to:
5) Can I avoid paying "use" tax in CA if I declare the car as personal
effects at customs? I am in the US with a F1 visa so this shouldn't
be a problem. Does the 90 days thing not count if I imported it this
way?
6) If you back date, do they want your registration from Canada too?
7) Can I drive around in CA with Canadian plates? I have both CND and
US licenses. The CND license has a sticker on the back they put on
that says "not valid in California". Since I'm using the US license,
I can drive. Since I have a CND license, I can own a car with CND
plates.

Thanks a lot.
 
Old Oct 11th 2002, 12:09 pm
  #2  
Stuart Brook
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Default Re: Buying car in canada/"avoiding" taxes

bob wrote:
    > It has came to light that used cars in Alberta have no tax whatsoever.
    > So I'm thinking about buying a car then importing it into the US to
    > California. I know the car is the same model and I can get the letter
    > from the manuf for EPA emissions. Since the car is like 60k US then
    > the tax of 10% is significant.
    > Things I know:
    > 1) If I buy a car and import it with nothing else happening, CA
    > charges use tax (~10%) if I import it within 90 days of the sale date
    > 2) Alberta has no sales tax at all on used cars
    > 3) I can get the letter need for the EPA (same car model anyway)
    > Things I could do:
    > 1) Declare car as personal effects, drive back to CA. Register it and
    > show my customs paperwork.
    > 2) "Back date" the bill of sale so it looks more than 90 days.
    > Probably not a problem since you fill it out yourself/private owner.
    > 3) Get Alberta plates/registration but CA insurance (Alberta insurance
    > probably wouldn't pay if you got into an accident since it's always in
    > CA). It seems insurance does not depend on registration. i.e. I can
    > buy a car and insure it with just the VIN without having had
    > registered it yet. Drive around for the 90 days in CA before really
    > registering it. I can do this since students out of state aren't
    > required to register their cars in CA while they are studying here
    > (not considered residents).
    > 4) Get it registered under my name and give it to someone else to
    > drive around in it for 90 days.
    > Things I'm not sure about and would like answers to:
    > 1) Can I avoid paying "use" tax in CA if I declare the car as personal
    > effects at customs? I am in the US with a F1 visa so this shouldn't
    > be a problem. Does the 90 days thing not count if I imported it this
    > way?
    > 2) If you back date, do they want your registration from Canada too?
    > 3) Can I drive around in CA with Canadian plates? I have both CND and
    > US licenses. The CND license has a sticker on the back they put on
    > that says "not valid in California". Since I'm using the US license,
    > I can drive. Since I have a CND license, I can own a car with CND
    > plates.
    > Thanks a lot.

You want people to recommend that you break the law with regard to not
paying taxes .... So I won't touch that one.

This "not valid in California" and the things that they have done really
makes it impossible to obey all the laws that apply. Customs says that
someone resident in the US cannot drive a Canadian plated vehicle
without the Canadian resident owner present in the vehicle. To get the
California license, you have to be resident in California. Unless
you've maintained a Canadian residence too, then I don't see how you can
not be illegal if you drive a Canadian plated car!

This business of tightening up drivers license issues since 9/11 has
become a nightmare. It's time the various authorities involved got
together and worked from the same order of service.

Stuart
 
Old Oct 11th 2002, 5:30 pm
  #3  
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Default Re: Buying car in canada/"avoiding" taxes

[
You want people to recommend that you break the law with regard to not
paying taxes .... So I won't touch that one.

Depends... if what you are attempting is tax avoidance it may be legal. If you plan to commit tax evasion... thats a crime.

The former is what tax lawyers and accountants are for.

However, all of that aside, you need to factor in the cost of driving said vehicle from Alberta to CA.

I have no knowledge of CA tax law but I do no that if you buy a car in (tax free) NH but are resident in MA you have to pay the tax to get your plates. Given that it is apparently illegal for a US resident to drive a Canadian plated vehicle in the US your only lawful route would be to get CA plates... at which point they may well demand the tax.
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Old Oct 12th 2002, 5:09 am
  #4  
Lt Col (Retd)
 
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Default Re: Buying car in canada/"avoiding" taxes

Originally posted by Rob S:
..... at which point they may well demand the tax.
When we regisitered our seven moth old car in Virginia the vehicle registration office wanted documentary evidence that we had paid sales tax within the US before we could regisiter it - and that was for a car we bought in New York.
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