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California out of state 90 day rule

 

Purchase of vehicle out of state of California for intended use out of the state of California  

 

To avoid paying California use tax you must claim for exemption and receive a Certificate of Vehicles, Motorhomes and Commercial Coaches Use Tax Clearance.  This allows you to register the vehicle with the DMV without payment of use tax.

If you are claiming the vehicle was not purchased for use in California, you may qualify for the exemption from use tax if the vehicle is used for 90 days or more (exclusive of storage) following the first entry into California or 90 days or more  prior to its first entry into the state.  You may qualify for the exemption if it is used outside of California more than one-half of the time during the six months period following its first entry into California.  At the end of the six months test period, documentation must be provided to the Consumer Use Tax Section in Sacramento, CA upon request by the State Board of Equalization..

The types of documents that should be submitted to verify your claim are listed below.  Send photocopies and not originals.  Suggest you keep a log book to document the location of the vehicle.

  • Campground receipts
  • Service/fuel receipts
  • Credit card/bank statements
  • Miscellaneous receipts (i.e. incidentals, meals, or cellular phone bills)
  • Any other similar documents showing the location of the vehicle during the six months test period of which the vehicle must have been outside of the state of California for 90 days or more.  Storage time out of the state does not count for meeting the outside of the state requirement.

From past experience (2003), at the end of the six months test period, BOE will send you notification that your claim is being audited and requests your documentation to be sent to the state by a designated date.  The audit takes about 30 to 60 days.  You will then be informed if you met the requirements for exemption from use tax.  They gave us a number to call to check on status of the audit.  We passed the audit.

Lessons learned from recent experience in acquiring the exemption certificate and DMV registration in state of California:

  • BOE may not process your paperwork for acquiring the certificate immediately.  It may take 2 or 3 days, depending on which BOE you use.  Suggest you call them first to make sure they can do it in the same day.  The BOE in Bakersfield, CA can accommodate the same day turn around.  Redding, CA will NOT.  Suggest you get a copy of the form for exemption claim from a BOE office and fill it out before going to the BOE office for the certificate.  You must state on the form that the vehicle was purchased outside of the state of California for intended use outside of the state.  Check with BOE for other information that should be included on the form.  BOE does not need to see the vehicle.
  • Make sure you receive the form from your dealership that documents the VIN and Federal Emissions number located on the engine.  With this form filled out and signed by a dealership official  (not yourself), you do not have to take your motorhome to the DMV to have the numbers verified by a DMV official.  Usually there is no space to park the coach at the DMV office.  You can go to the DMV before you receive the exemption certificate and have all the paperwork taken care of, including paying the fees, except for receiving the plates.  Just tell them the certificate is in work.  You can then take the certificate and DMV documentation to any DMV office to receive your plates.
  • It is unknown how long the exemption with the 90 days or more requirement will be in effect.  Rumor has it that the law is going to be changed back to 1 year out of the state for the exemption, but the date has not been set.  (Maybe early 2008?)
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