Sales Tax Question

Sales Tax Question

For those that have delivery scheduled, is the sales tax based on the base price of the car or does the tax price include the options like EAP and FSD? Is that universal in every state?

DTsea | 20 décembre 2017

Includes all up price including options.

Frank99 | 20 décembre 2017

and, in every state that I'm aware of, your trade-in is subtracted off the sales price before tax is calculated...

Robocheme | 20 décembre 2017

I believe that there are eight states where the trade-in value has no effect on the sales tax. California is one of them

TexasBob | 20 décembre 2017

Does anyone know if sales tax is subtracted from trade-in in Texas? With every other car OEM it is only subtracted if you trade in to the new car dealer but since Tesla is technically not a licensed dealer in Texas (because of our ridiculous laws) I suspect it is not. Which would totally suck because it is worth ~$1,400 to me.

Rutrow | 20 décembre 2017

Somebody said on a thread in this forum that software isn't subject to sales tax in California.*

* I don't know. I haven't been in California in years. Ask a tax professional.

jefjes | 20 décembre 2017

What happens if you get the letter to accept delivery at say the Fremont delivery center but you live in Nevada and don't want to take delivery in CA? Does Tesla specify at the time you configure and pay your additional $2500 where you must take delivery? Shouldn't they be obligated to at least deliver your car in the state of your residence at the time of placing your reservation unless the state restricts them from doing so? I live in Reno, NV and my nearest Tesla store is in Rocklin, CA plus the Fremont delivery center is 4.5 hour drive away. There is a Tesla store in Las Vegas and it would be cheaper and faster for me to catch a flight to Las Vegas and drive 8 hours back than go to Fremont. The problem either way would be if there were any delivery inspection issues that needed to be fixed before accepting delivery. It's my hope that Tesla will schedule a deliver event somewhere in Reno where several of us will be able to get our cars when the time is here. This concerns me because I already know of a Tesla employee from the Gigafactory that had to take a bus then a train then a Uber to get to Fremont to drive his car back here. Not being a current Tesla owner myself, I'll probably have plenty of time to watch and see how this plays out but I'm not liking the whole come to us at your inconvenience with a $50k check in hand and we'll have your car ready when we say so thing.

hsadler | 21 décembre 2017

If you take delivery in California, you pay California Tax. I do not know about Nevada, but most states will deduct that from your state's registration tax. (If California is higher - you don't recover the difference)
Some states don't credit your California tax at all
My tax (Calif) is 8.75% of sale price. I think that is based on my location. Out of staters will pay Fremont sales tax.

An attempt was made to eliminate the tax from out of stater's, but failed this year.

LostInTx | 21 décembre 2017

TexasBob, I'm actually quite afraid that the problem is worse than we know. In Texas, as you know, sales tax on new cars is 6.25% but I saw this earlier, which would royally piss me off:

Texans who buy a used vehicle from anyone other than a licensed vehicle dealer are required to pay motor vehicle sales tax of 6.25 percent on the purchase price or standard presumptive value (SPV), whichever is the highest value.

The supposition being that even without a trade-in, we're subject to a sales tax higher than 6.25% simply because Tesla isn't a "licensed vehicle dealer".


stockbandit91 | 21 décembre 2017

Software, if electronically delivered, is not taxable in CA. If any physical CD/USB drive/Etc is included it becomes a taxable transaction. Based on Telsa providing the software OTA I would expect at least the yet to be delivered full self driving to be non-taxable. It gets more complicated with enhanced auto pilot because it turns more hardware on now, so I do not have a definitive answer because technically the hardware is included at the standard price already, which is taxed. The extra charges seem to me to be purely electronically delivered software. Anyone who has purchased Enhanced auto pilot in California should be able to look at their paperwork and answer the sales tax question quickly.

andy.connor.e | 21 décembre 2017

Its the entire price of the vehicle, before delivery costs. All options in addition to the $35k have applicable sales tax.

andy.connor.e | 21 décembre 2017

Thats why if you get first production configuration and paint color change, it quickly becomes $55k.

Rutrow | 21 décembre 2017

If you add EAP/FSD after delivery it might make cents* to include it as part of road trip to CA. Surely your home state wouldn't charge sales tax on souvenirs you bring home from vacation!(?)

*fun with words that sound the same but have different meanings**

**Mollom won't let me use the actual word. I guess it looks like a slur!?!

Rutrow | 21 décembre 2017


Mike83 | 21 décembre 2017

I like paying California sales tax since they do care about it's citizens and we have beaches, mountains, deserts, bike paths, great cities and many happy people who remember what it was like to be an immigrant. They serve my ethics while the GOP is becoming a fossil fuel dinosaur who don't know how to live happy.

rxlawdude | 21 décembre 2017

Yes, @Mike83, but the law specifically exempts software delivered electronically. The last I heard from people who activated EAP or AP1 after the vehicle purchase, Tesla was charging tax on OTA-delivered software.

i believe that practice is patently unlawful in California under black letter law, and anyone charged tax needs to file a complaint with the California Department of Tax and Fee Administration.

JAD | 21 décembre 2017

Tesla would clearly prefer not to charge tax if they didn't have to. My guess is a ruling has been made that since the software is part of the specific car, it is being delivered in a physical form and therefore taxable.

Otherwise, Tesla could sell you a new model 3 for $30k, then require an over the air software update for $25k and the state would lose a LOT of tax revenue.

andy.connor.e | 21 décembre 2017

Sales tax is a government thing. Not a company thing. Companies dont care about sales tax, that doesnt go to them.

TexasBob | 21 décembre 2017


I just spoke to the Tesla store in the Galleria in Houston. They confirmed that you are only taxed on the Net value (ie excluding the value of the trade-in) just like any other auto dealership. So very good news!

BTW, if you are referring to "standard presumptive value" I believe that only applies to 1) a used car 2) when the purchase price is below the NADA value. The purpose of the SPV is to prevent you from, for example, selling a car to someone for $1 on the bill of sale which is taxable and then selling the floor mats for $15,000 on a separate transaction which is not taxable.