Quote:
Originally Posted by Ilyam5
Did some digging on leasehacker - avoiding double sales tax is not easy - even though you have 10 days to transfer title
Your buyout is different from 3d party (dealer buyout) some times by 20-25%. So lets say we are looking for personal buyout and then bringing it to the 3d party buyer (private or carmax etc). #d party needs the title to be in your name to buy the car from you
here is the process:
- Get a buyout quote from your leaseholder and mail them a check. You must stop driving the car at this point. Any use of the car after this will trigger a use tax bill in CA. Pay them for whatever expedited title processing (and hope they don’t lose your check for that,).
- Wait for the original title-release to arrive. The day it arrives, take it to the DMV, transfer the title into your name, and pay the sales tax. Pay for expedited title processing to speed this process up. At this point, your 10 day clock starts. ("The sale of a vehicle to a lessee by a lessor may be considered a nontaxable sale for resale. If the lessee transfers title and registration to a third party within 10 days from the date the lessee acquires title from the lessor at the expiration or termination of a lease, the sale will be presumed to be a sale for resale. Transfer of title and registration occurs when the lessee endorses the certificate of ownership.)
- Within 10 days, you need to receive the new title from the DMV and sign a bill of sale with Vroom, Carvana, etc. showing that you sold the car. This may be impossible, given the time it takes to get a title from the DMV, but the way the law is written, this is what is required.
Use this bill of sale and the paperwork from the original title transfer to show that you sold the car within 10 days and request a refund of the sales tax paid. This should be technically possible using CDTFA-101, but I would contact the CDTFA first to find out exactly what documentation they will ask you to provide .
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States can be different in how taxing and the process works, or doesn't work. It is best for a person to contact the DMV/Dept. of Rev/etc in their state to get the specific process, if it can be done at all.