Is there such a thing as double taxation when purchasing a vehicle?

Question

I am from Washington state and I am planning on buying my next vehicle in Colorado to save some money on tax. If I pay tax on the vehicle in CO and drive it to Washington state to get it registered do I have to pay tax again on it when getting it registered in the state of Washington? Thanks for your help

Answer 1

I don't know about your two states, but I live on the boundary of three states where people buy from any of the neighboring states.  My daughter also came from out of state and bought a car.  She had to fill out some paperwork with the dealership and she only paid tax on her state of residence.  

So, no, you won't save money on taxes, but if you do it right you won't pay two states' taxes.

Answer 2

If you are a Washington resident at the time of purchase, you will probably be required to pay the difference in sales tax when you apply for the title in Washington.  So, no tax savings by buying it out of state.

Answer 3

You will not be double taxed. But the best thing to do is buy a car in a state with low taxes and register it where the registration price is also low (example Idaho)

You are still going to pay to have it registered but you won't be double taxed.

Double taxation is called capital gains tax.

The only way you could every be double taxed if for some odd reason the car increased in value and then you sold it for more money then you bought it from. YOu would be paying tax on the new income and then tax because you made new income.

I hope this clears things up.

Answer 4

Tax always has to be paid in your home state.  You may have to pay tax in Colorado, but you will be able to file for the return as soon as the vehicle is proven removed from the state.  You may also be purchasing from a Colorado dealer licenced to collect Washington state tax and issue a receipt.

Answer 5

While I don't live in either Washington state or Colorado, I did move from New York state where I had bought my vehicle new & paid taxes on it when I bought it, then registered it to get my license, etc.  When I moved to North Carolina, not only did I have to pay taxes on the now 3 year old vehicle when I registered it, they also collect an annual tax on the vehicle based on age & weight.  Plus, when I moved from one county in North Carolina to a different county, I got taxed again!!

So much for those thinking of retiring to North Carolina.  Let me tell you, although several things cost less upfront, there are extra fees & taxes everywhere you turn, so in the long run it really isn't much cheaper than anywhere else.

So, my advice is to go to the website of the county you live in & have to register your vehicle in & see what it says about paying taxes at time of registration.  Or call your local DMV & ask over the phone.  (Personally, I'd want to see it in writing.)