Out of state car purchase (Denver, Boulder: property taxes, insurance, military)

[jazzlover]

Originally Posted by Charles

So what I am getting out of this is that it really doesn't make a difference which state I purchase my car. The taxes and registration costs would be the same in either case (buying in Colorado or buying out of Colorado).

So if I bought out of state, I go to the dealer, hand him the money for the car with no tax. I drive it to Colorado. I go to the DMV in Colorado and pay tax and registration fees. Sound right?

Pretty much. Remember, too, if you trade in a vehicle, you will pay sales tax on the difference of the purchase price of your new vehicle, less what was allowed for the trade-in. If you sell your used vehicle yourself, you will pay sales tax on the full purchase price of your new car.

[Charles]

Originally Posted by jazzlover

Pretty much. Remember, too, if you trade in a vehicle, you will pay sales tax on the difference of the purchase price of your new vehicle, less what was allowed for the trade-in. If you sell your used vehicle yourself, you will pay sales tax on the full purchase price of your new car.

Good info, thanks. I will be selling the wife's 99 2WD Durango; was planning on private party. Kelly's Private Party is about $4800, Kelly's Trade in is about $3000.

[denverian]

Originally Posted by jazzlover

Call your local county clerk's office for exact information. If you purchase the vehicle from out-of-state and do NOT intend to register it there (which you sure as hell shouldn't if Colorado is your state of residence), then that state should not charge you their sales tax. When you register the vehicle in Colorado, you will have to pay the sales tax due. Do not be fooled by the 2.9% comment. In most all jurisdictions, there is some combination of county and city taxes, plus RTD tax in the metro counties. This can push the sales tax percentage up over 8%. I am not sure, but I don't think you have to have a VIN inspection if the vehicle is new and you have the Manufacturer's Statement of Origin (MSO) as part of your paperwork. The Clerk's office can tell you that. I haven't had to deal with Colorado emissions inspection, so that is something to check on. Also, Colorado requires proof of insurance to register a vehicle.

Undoubtedly, someone on the board will post some little reindeer game to play to avoid paying Colorado sales tax or registration fees. I will say the same thing about those types of tax avoidance (if not outright evasion) that I do about other tax evasion schemes: You may think that you're just screwing the government out of some tax money, but you are really screwing your neighbor. The tax burden is there from the various taxing entities providing services--it is just divided up among the taxpayers. If you (or whomever) doesn't pay their fair share, the rest of the taxpayers just have to pick up the tab.

Here's a question for you. I have neighbors who've lived in their house for 3 years, yet continue to keep Virginia plates on two cars. I notice the stickers changed, so they've renewed them in VA while living in CO. They're not military either. I like them, but every time I pass their big Suburban w/VA plates, it just pisses me off. I checked and VA has no car tax and it's only $29 to register your car for two years.

I get my emissions tested and pay my taxes on my car, so why shouldn't they? They live here and use our roads. And they live in a half million dollar house, so I just see it as being blatant tax cheats, it's not an issue of affordability. Can you anonymously turn someone in for this?

[denverian]

Originally Posted by sunsprit

Bringing a vehicle ... new or used ... into Colorado for registration will require the physical VIN inspection. A new vehicle may be exempt (coming in on an MSO) from an actual emissions test, but will be required to get the emissions decal for the windshield and display it.

At the point of titling and registration, you will pay the appropriate Sales Taxes due to the state, county, municipality, and any special tax districts here in Colorado based upon the address the car is registered to.

The "schemes" of yesteryear to "register" a car at a lower tax rate address are pretty much done and gone. The state and the cities are too jealous of their tax revenues anymore to tolerate this stuff and are very aggressive about cross checking and verifying where the car is really based. You simply cannot claim your infrequently used cabin in a remote county area of Colorado for your car location anymore and keep it mainly in the Front Range areas. Especiallly with the law enforcement folks looking for cars frequently seen in Denver (and the Front Range emissions area) without an Emissions sticker in the windshield. They will cite your car for being a frequent front range area car ... and they really do keep track, especially if your car is seen in the same parking lot areas on a daily basis.

Part of their efficiency about this enforcement now comes from the ability of law enforcement and insurance companies to cross check each other's databases via on-line computer data. You don't want to get caught registering your car at one address and having your insurance package at another residence with other vehicles there ... it raises red flags for the authorities, and they have a few folks who will actively pursue finding out why.

FWIW, Colorado's enforcement of this goes back well into the 1960's ... when I moved here with out of state plates as a full time out of state Univ student. I had a part time job and it only took the local sheriff's deputy a month to write a citation for getting Colorado plates on my car, because they saw it parked several times in the same employee parking lot. At that point, the burden of proof that you don't need Colorado license plates (and now, emission inspection sticker) is on you.

I even had Denver police recently write a citation for my Wyoming plated car when they saw it repeatedly parked in Denver for not having a front range user emission sticker. Yes, that's right .... even if your car is registered somewhere else and you are a frequent Denver commuter, you must have a Colorado emissions sticker. In my case, I was on a contract job in downtown Denver for 2-3 weeks, but I still had to file with Denver that my frequent car use was a temporary assignment. If I'd been there for over a month, then I'd have had to gotten an emissions inspection. The same goes for someone commuting into Denver from another county area which doesn't require the emissions inspection.

Uh...there are no stickers anymore. There used to be the "B" (basic) and "E" (enhanced) emission stickers when I lived here in the early '90s. When I moved back in 2005 and got my emissions test, I asked where my sticker was and was told they no longer do the window stickers. And from Air Car Colorado, "Effective July 1, 2001, window stickers were eliminated by state law." Now your renewal sticker on the back plate may be a different color if you're in a non-emissions area. That was the case back when I worked at the DMV.

[jazzlover]

Originally Posted by denverian

Here's a question for you. I have neighbors who've lived in their house for 3 years, yet continue to keep Virginia plates on two cars. I notice the stickers changed, so they've renewed them in VA while living in CO. They're not military either. I like them, but every time I pass their big Suburban w/VA plates, it just pisses me off. I checked and VA has no car tax and it's only $29 to register your car for two years.

I get my emissions tested and pay my taxes on my car, so why shouldn't they? They live here and use our roads. And they live in a half million dollar house, so I just see it as being blatant tax cheats, it's not an issue of affordability. Can you anonymously turn someone in for this?

You might just call the local police and mention it to them. Admittedly, this may be a low priority for law enforcement concerned with murder and mayhem, but sometimes out-of-state plates being around a place for a long time will trigger law enforcement to check for other activities and violations. The police I know tell it like this: If someone is avoiding registering their vehicles, they just might be engaging in some other activities where they don't want local law enforcement knowing their identity. Not to say this is the case with your neighbors, but who knows anymore? A lot of people are reluctant to "rat out" tax deadbeats, but who is getting hurt by them? The taxpayers who follow the laws and pay their fair share of taxes, that's who!

There are a lot of scams to avoid sales taxes/registration fees. When I was living in Wyoming, a lot of people with expensive ($500,000+ RV's, for example) vehicles would set up a "shell" Limited Liability Corporation (LLC) in Montana to own their RV. This was because Montana did not have a sales tax. Needless to say, Wyoming didn't look very highly upon that. I think the state is going after scams like that now.

[sunsprit]

denverian ...

1) call your local sheriff's dept and turn those neighbors in. If you don't get a prompt reponse, call the DMV. They're very interested in tax and registration cheats, and those folks can be readily proven from the property tax rolls to have been in residence for long since the 30 day grace period for licensing their vehicles in Colorado. There's fees, taxes, fines and interest to be paid on the years they didn't register but operated the vehicles in Colorado as residents. Nail 'em.

2) The Fed statutes under which Colorado's Front Range county areas are emissions controlled/inspected areas dictate and authorize the areas to require all vehicles operated in the control area on a regular basis to have an emissions inspection. So, for someone registered in a county outside the inspection area, I'd expect they use the different colored registration sticker on the plate. However, for the folks who might commute to Denver or Boulder on a daily basis from Wyoming (and there's a lot of them), they wouldn't have a Colorado license sticker ... so the emissions program must have a way to identify them. I know that was the citation written for my car last October ... that I was in violation of not having an emissions inspection on my 1997 Subaru, which the officer saw was parked in the same parking lot daily every day for 2 weeks. I know they're aggressively seeking to get polluting vehicles off the streets along the Front Range ... the pollution source cars don't pay attention to which county they're registered in, but Denver's federal compliance with air quality is still depending upon not having polluting vehicles operating there. I don't know for sure, but they must issue some decal or other visible identification so that an officer would know that my vehicle was in compliance with the regs.

3) Wyoming is aggressively going after tax scam folks, like the ones with the out of state shell corporations. There's some heavy penalties for not Wyoming registering your vehicle within 30 days of bringing into the state, especially now that they require proof of insurance to register your car in Wyoming ... and some folks with out of state registrations are not in compliance with the insurance requirement. So it's a double violation ... and Wyoming has recently upped the fines so that it's less expensive to insure your car than to be caught without it. As a farm/ranch operator, they're even going after our equipment/machinery purchased out of state and brought into Wyoming; I have to file each year with all of the stuff we've bought and pay property taxes on it ... even the stuff I've paid sales taxes on in other states when I bought it.

[suzco]

Originally Posted by sunsprit

. . .
I know that was the citation written for my car last October ... that I was in violation of not having an emissions inspection on my 1997 Subaru, which the officer saw was parked in the same parking lot daily every day for 2 weeks. I know they're aggressively seeking to get polluting vehicles off the streets along the Front Range ... the pollution source cars don't pay attention to which county they're registered in, but Denver's federal compliance with air quality is still depending upon not having polluting vehicles operating there. I don't know for sure, but they must issue some decal or other visible identification so that an officer would know that my vehicle was in compliance with the regs. . .

There's no decal or sticker. When you get the emissions test done, they give you a printout of the report. (That's what you must present when you register a vehicle in metro Denver, for example). You could keep the copy of the emissions test report the same way you keep a copy of your registration and give that to the officer.

[jazzlover]

Originally Posted by suzco

There's no decal or sticker. When you get the emissions test done, they give you a printout of the report. (That's what you must present when you register a vehicle in metro Denver, for example). You could keep the copy of the emissions test report the same way you keep a copy of your registration and give that to the officer.

A 2005 vehicle I purchased in Colorado had (and still has) a "Colorado Emission Exempt" sticker on the windshield (it's a diesel).

[vfrpilot]

Charles-
With your address the sales tax should be around 4%. We've bought 5 cars since we've moved here and whenever we go to change ownership at the DMV, it's your residence that set's the tax rate. We've even bought appliances and furniture at the lower tax rate because we live in El Paso County. You have to have stuff delivered to your home and some times the delivery charge more than makes up for the sales tax difference though.
BTW- El Paso County discontinued smog checks as of 1/07.

[jkcoop]

Originally Posted by Charles

So what I am getting out of this is that it really doesn't make a difference which state I purchase my car. The taxes and registration costs would be the same in either case (buying in Colorado or buying out of Colorado).

So if I bought out of state, I go to the dealer, hand him the money for the car with no tax. I drive it to Colorado. I go to the DMV in Colorado and pay tax and registration fees. Sound right?

That's right - we've done it 3 times when we bought cars off of ebay, went and got them and brought them back. If you are getting a loan, make sure, unless you have a lot of cash on hand, to think that amount into the loan. It won't just be the sales tax but also the ownership tax you will shell out at the DMV. With one of the vehicles we did have an issue with some paperwork. Colorado is very strict on what paperwork they need. We had to go back to the dealer and them back track to Detroit. Long story but a bit of a pain. Nothing that couldn't be fixed though.