DaveinOlyWA wrote: because of TV game shows,( i think, at least i have heard that excuse several times including when i worked for the State waaay back when) CA State levies sales tax based on MSRP value, not the actual sales price. most other states (MA might be an exception) base it on the sales price.
Close, but not quite accurate. Game show winnings are considered income, so you pay state and federal income tax on your winnings, not sales tax. The bad news is that your income tax liability will be assessed on the retail value of the prize (MSRP, in the case of winning a car), whether the game show got it for less or not (they often receive discounts or free items from manufacturers for promotional value). There is no sales tax due on the transfer of an automobile to a contest winner when sales tax has been paid on the prior transfer of the automobile to the promoter of the contest. The transfer to the contest winner is not a taxable sale because the automobile is acquired by chance or skill, and there is no use tax liability because the automobile is received as a gift or premium rather than a purchase.
In a straight retail purchase of a new car from a dealer, however, the sales tax in CA on the purchase is not based on MSRP, it is based on the actual sale price. I bought my Leaf for $1,000 under MSRP and paid tax only on the purchase price, not MSRP.
now if leasing, i dont know. that might be different.
I tried to explain this in my previous post above. In the case of a lease, the tax is measured by the "rentals" payable. Generally, the applicable tax is a use tax upon the use in this state of the property by the lessee. The lessor must collect the tax from the lessee at the time rentals are paid by the lessee and give him or her a receipt. The lessor (Nissan in this case) is crediting your lease purchase agreement for $7500 up front (the tax credit they will receive on the vehicle from the Feds) as a "capital reduction" on the price, but it is still part of your rental purchase price, and the tax is still assessed on it up front, along with any other down payment you make at that time. Then you pay tax on each of your lease payments as you make them. At the end, you pay tax on the residual value, if you decide to keep the car. If you don't, then the dealer charges tax on the value of the used car when they sell it to someone else. Even if you keep the car and then sell it privately later on, the new owner has to pay use tax when they register it and transfer title. In the end, the state gets their $$$ on the full purchase price of the car (and more), either way.
if you have any questions or doubt on the CA State sales tax. talk to anyone who recently upgraded to a "free" phone and find out what they paid.
This is a whole 'nother ball of wax--there are specific sales tax laws in CA regarding telecommunications devices, especially when "bundled" with services at a deep discount. Directly from the CA tax code: "BUNDLED TRANSACTIONS. Tax applies to the gross receipts from the retail sale of a wireless telecommunication device sold in a bundled transaction, measured by the unbundled sales price of that device. Tax applies to the unbundled sales price whether the wireless telecommunication device and utility service are sold for a single price or are separately itemized in the context of a sale or on a sales invoice. The retailer of the wireless telecommunication device is required to report and pay tax measured by the unbundled sales price of the device and may collect tax or tax reimbursement from its customer measured by the unbundled sales price. Tax does not apply to the charges in excess of the unbundled sales price made for telecommunication services." In other words, they may give you the phone for free or at a discounted price as a promotion in order to get you to buy the bundled service, but they have to charge sales tax based on the unbundled value
of the phone. (See http://www.boe.ca.gov/lawguides/business/current/btlg/vol1/sutr/1585.html
for more than you want to know about this subject.)
Disclaimer--I am not a CPA, but I can play one on the internet as well as anybody. The above is not meant to represent tax advice. Believe me at your own risk. If you make a mistake based on this post and get in trouble, you agree to hold harmless these forums, authors of this post, or other subsequent posts, or any party, company, corporate entity, individual, or estate, living or dead, associated or otherwise connected with the above, and shall not hold them liable for any damage you do to your person, other people/living things, or property belonging to you or any other entity in the known universe. You take full responsibility and liability for any action you choose to take. Your mileage may vary. Do not fold, spindle or mutilate. No electrons were harmed in the transmission of this message.
La Jolla, CAPlowshare Media
2011 SLe #1317 del. 4/1/11
1st bar lost at 31,953 miles
2nd bar lost at 38,685 miles
3rd bar lost at 50,711 miles
4th bar lost at 59,758 miles after 64 months
Battery replaced at 61,307 miles.