Should I buy a new car in Washington or Oregon?
March 17, 2006 11:44 AM   Subscribe

I'm thinking about buying a new car in the next year. I live in Seattle, Washington, where the sales tax is about 8.8%, but I visit Oregon frequently, where there is no sales tax. Would there be any drawbacks to buying the car in Oregon to avoid the sales tax? I would still register and insure it in Washington.
posted by matildaben to Travel & Transportation (18 answers total)
 
I am almost postive Washington will make you pay sales tax when you register the car with them.
posted by mildred-pitt at 11:49 AM on March 17, 2006


You pay sales tax in the state in which you register the car.
posted by zsazsa at 11:53 AM on March 17, 2006


Yep, can't avoid the sales tax. WA state started cracking down hard on this a few years ago.
posted by luneray at 11:58 AM on March 17, 2006


I am under the impression that when you go to register the vehicle in Washington, they will ask for a Bill of Sale showing them the amount of sales tax paid, which in your case will be zero. Upon which they will charge you a "Use Tax" equal to the sales tax of the county you live in. Thus in order to legally drive the vehicle in Washington, you have to pay the sales tax anyway.
posted by HoldFast at 11:59 AM on March 17, 2006


I agree with the first few comments.

You pay the tax when you register the car, not at the point of sale. You have to show the receipt for the car when you register it, and they calculate your local tax based on the price you paid.

The only way to avoid this is to register the car in another state. But to do that, you'll need an address in that state and some claim to be a citizen of that state. I know someone who did this with Wyoming because the registration fee was so low there, but he had some vague claim to residency.
posted by Mid at 12:00 PM on March 17, 2006


WA state Dept of Revenue FAQs
posted by luneray at 12:00 PM on March 17, 2006


Um-
zsazsa might have the most likeable answer - but I am almost sure it's wrong for Washington State.
posted by mildred-pitt at 12:01 PM on March 17, 2006


Washington Use Tax and Sales Tax

Use tax is due if:
Goods are purchased in another state that does not have a sales tax or a state with a sales tax lower than Washington’s. For example, items you purchase in Oregon that are used in Washington are subject to use tax.

posted by frogan at 12:03 PM on March 17, 2006


zsazsa might have the most likeable answer - but I am almost sure it's wrong for Washington State.

Isn't zsazsa's answer the same as everyone else's, more or less?
posted by Kwantsar at 12:06 PM on March 17, 2006


I read it wrong, sorry!!!!!!!!
posted by mildred-pitt at 12:06 PM on March 17, 2006


even if you buy it out of state and then register it in that same state, Washington will *still* pooch you for inspection fees. I had that happen years back when I moved from California to Washington. Cost me a couple hundred bucks on a car that was valued at diddly squat.

And here's what the WA legislature says:
"Vehicle Registration

I recently moved to Washington, do I owe tax when I register my car?

If you purchased a "private motor vehicle" in another state more than 90 days before moving here, you do not owe Washington's use tax. See RCW 82.12.0251.

Note:

A "private motor vehicle" is a privately owned motor vehicle with a load capacity of 1500 pounds or less.


Pickup trucks with a load capacity greater than 1500 pounds, recreational vehicles, watercraft and trailers do not qualify for this exemption.

If you purchased a "private motor vehicle" in another state within 90 days of moving here, you owe use tax when you register and license it.

Note:

If you paid sales tax and used the vehicle in another state, you may apply that tax against the Washington use tax you owe. See RCW 82.12.035.
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posted by drstein at 12:31 PM on March 17, 2006


I moved to WA in Sept having bought a car in august. I waited two months to register my car and avoided paying the tax. I wasn't smart, just lazy.
posted by rschroed at 12:48 PM on March 17, 2006


what if you purchased the car in a state that had a lower sales tax rate? would you need to make up the difference?
posted by jessica at 1:12 PM on March 17, 2006


I wonder if they are going to renew the sales tax deduction for 2006. In tax years 2004 and 2005, if you itemized your deductions on your income tax return you could also deduct the sales tax paid on your car (in WA and in any other state where there was no state income tax). The sales tax thing was temporary, and if it's not renewed or if you don't itemize then you're SOL come tax time.
posted by crazycanuck at 1:58 PM on March 17, 2006


Just to make the question more general: every state (AFAIK) that has a sales tax has a similar set of rules so that you can't go next door to [no sales tax state] and buy your car there and dodge the sales tax.

These laws were implemented at the urging of auto dealers.
posted by jellicle at 2:34 PM on March 17, 2006


jessica- I bought a car in Florida and drove it straight to Washington, where I live. I had to pay the difference in sales tax when I registered the car.
posted by hyperfascinated at 3:00 PM on March 17, 2006


you gotta love this one...

when i moved here i had just been given a piece of shit car by my dad, which i drove out from massachusetts.

when i went to register it in seattle 2 months later, they actually charged me sales taqxbased on the blue book value! i had not paid a dime for the car, but had to pay like $300 tax to WA state,

bastards.
posted by tristeza at 5:38 PM on March 17, 2006


California has this law too. And it's a real bitch too since sales tax here is high.

On a more meta level... I think it's safe to assume that if you think up one of these crazy harebrained ideas for cheating the system to save tax money that thousands before you have as well, and that they would be onto it already. Of course, if you do think of a harebrain idea to get out of paying taxes and it works then consider yourself gifted.
posted by Rhomboid at 2:28 AM on March 18, 2006


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