Out-Of-State Tesla Buyers To Be Exempt From Paying Tax In California

Those who order a Tesla and take delivery in the company’s home state of California, while living out of state, will soon no longer be subject to sales tax, following the passing of a new bill by the state’s senate.

The new bill — SB 680 — passed by a substantial majority (33–2), and is now slated to go to the State Assembly.

The idea behind the bill — according to its senate sponsor, Bob Wieckowski (D-Fremont) — is that, following the bill’s implementation, more buyers will choose to pick up in California, thereby spurring “industrial tourism.”

Green Car Reports provides more:

That’s an opportunity afforded to buyers of European luxury cars, and Wieckowski hopes to spur “industrial tourism” in his senate district (which includes the Tesla plant). He envisions buyers from other parts of the US visiting Tesla’s assembly plant in Fremont to take delivery of their cars, then staying to see the sites.

Today, out-of-state Tesla buyers who take delivery within California must pay the state’s 7.5% sales tax on the car. When owners re-register the cars in the states they live in, they also pay any increase in the sales tax due if their home-state rate is higher. (No refund is given if home-state rates are lower.)

The new bill, SB 680, would keep the sales-tax exemption in effect until January 1, 2020, and require the buyer to take the vehicle out of the state within 30 days. It specifically excludes buyers from qualifying for California’s $2,500 purchase rebate for a zero-emission vehicle and its single-occupant access to carpool lanes.

This news is probably of particular interest to potential Tesla buyers in Texas — as buyers there are currently required to take delivery outside of the state, thanks to pro-dealership, anti-Tesla laws. This new law means that Texas buyers will be able to notably cut their tax liability on the purchase.