How was California tax measured when a California dealer delivered a car in Michigan and the buyer later brought and used it here?
Apply this to your situation
This page answers the general question as of 1950. Ask about yours and see what current California tax law says, with citations.
Plain-English summary
A California automobile dealer delivered a vehicle to its buyer in Detroit, Michigan. California said that out-of-state delivery was not subject to sales tax, but use tax applied if the buyer later brought and used the car in California.
Section 6011 excluded separately stated transportation charges incurred after purchase from the sales price. Because the dealer made no transportation charge to this customer, the historical use tax was measured by the actual price charged for the car.
Common questions
Did the California dealer owe sales tax on the Michigan delivery?
No under the stated facts.
Could the buyer avoid use tax by bringing the car to California later?
No. The letter applied use tax once the automobile was brought to and used in the state.
Citations and references
- Cal. Rev. & Tax. Code § 6011 — sales-price and separately stated transportation-charge rule quoted by the source
- Sales and Use Tax Ruling 75 — historical measure-of-tax guidance cited by the source
Source
- Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
- Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/570-0000-all.html
- Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/570-0420.pdf
Original ruling text
570.0420
STATE OF CALIFORNIA
STATE BOARD OF EQUALIZATION
May 25, 1950
Dear ______,
This is in reply to your letter of May 15, 1950.
The sale of an automobile by a California dealer with delivery of the vehicle to the purchaser at Detroit, Michigan, is not subject to sales tax, but the use tax applies if the automobile is brought to and used in California. Use tax is computed at three per cent of the sales price of the vehicle. Section 6011 of the Sales and Use Tax Law states, in part, that the sales price is the total amount for which the automobile is sold less “transportation charges separately stated, if the transportation occurs after the purchase of the property is made.” Inasmuch as your letter indicates that no transportation charge is made to the customer, the use tax will be based on the actual price charged, as indicated in Sales and Use Tax Ruling 75, copy enclosed. Very truly yours,
E. H. Stetson
Tax Counsel
ARM:mgb
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