Colorado Group Buy with Granger

[BroncoChicken]

I’d be willing to bet you could get enough extra selling your existing car private party to more than cancel out the sales tax savings.

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[Apples]

@BroncoChicken I think you glossed over this line:

If a Colorado resident purchases a motor vehicle outside of Colorado and registers it in Colorado, the purchaser must pay Colorado use tax and any applicable local use tax at the time of registration

So, if you paid the Iowa sales tax rate when you purchased you would get credit for that amount but still owe the delta of 2.31% upon registering in CO. However, Granger may be set-up to take the entire 8.31% tax that will be owed to Denver. That is something the OP and Ganger can clarify.

The difference is the use tax is almost uniformly lower than the sales tax. For example, in Aurora, CO where I live, sales tax is 8% but the use tax is only 3.25%

 

[Jason]

I saw that, but it specifies that you owe the use tax, not sales tax at registration. At the beginning of the section it states that vehicle sales made outside the state are not subject to Colorado sales tax. You also get to apply the Iowa sales tax you paid towards the use tax, effectively canceling it for at least the first year.

The way I read it, if you are making a vehicle sale, then you don't need to collect sales tax. If you are making a vehicle purchase, then ... "If a Colorado resident purchases a motor vehicle outside of Colorado and registers it in Colorado, the purchaser must pay Colorado use tax and any applicable local use tax at the time of registration."

I have done this a few times (not in CO though), and one time I paid no tax in the other state, and I wrote a check at my home state's DMV for the whole amount. Another time, I paid the out of state tax (which was lower), so I only owed the delta between the state where I bought my car, and my own state's tax rate. I think that's what will happen here.

 

[BroncoChicken]

Fair enough.

 

[Jason]

The section it’s in is titled “Vehicles purchased outside of Colorado.” I get the skepticism and I know what the general rule is on this. I’ll call the Dept of Revenue to confirm tomorrow.

I hope I am wrong! If you’re right, tell me where I can send money for a bottle of bourbon.

 

[Apples]

Another time, I paid the out of state tax (which was lower), so I only owed the delta between the state where I bought my car, and my own state's tax rate. I think that's what will happen here.

You are correct, except, you're confusing sales tax with use tax. The use tax is significantly lower than sales tax in Colorado. It's also only a little over half of Iowa's sales tax rate.

 

[BroncoChicken]

I hope I am wrong! If you’re right, tell me where I can send money for a bottle of bourbon.

I’ll be sure to post when I get an answer.

 

[BuckyBronco]

You are correct, except, you're confusing sales tax with use tax. The use tax is significantly lower than sales tax in Colorado. It's also only a little over half of Iowa's sales tax rate.

I don't believe this is correct. Sales and Use tax is essentially the same thing and the same rate. To better explain use tax I'll use this example: when you used to be able to buy things online without paying sales tax, you were technically still responsible for paying use tax on those items to the locale where you reside and use/store whatever you purchased. (Though, no one really did this).

Sales and Use tax is the same rate everywhere is far as I can tell (8.31% in Denver, for example). No matter where you buy the car, you're going to pay the 8.31% if you live in Denver and register the car to your address.

In Aurora, which you mentioned before, the local city (Aurora) sales and use tax rate is 3.75%. On top of that you have the state sales and use tax rate of 2.9%, the county sales and use tax rate of 0.25%, the Greater Denver RTD sales and use tax of 1%, and the random cultural arts etc. sales and use tax rate of 0.1%. I think that results in 8%, essentially. You will have to pay this percentage regardless of where you purchase the car.

Edit to add: I may have this wrong, but as Granger doesn't have nexus in Colorado, they do not have to collect and remit sales tax to Colorado. I don't believe they have to charge you any sales tax if you're from out of state, though they probably can so you can wrap it into financing and then they can give you that amount back, which you'll have to pay when you register the vehicle.

TL;DR - You have to pay the local sales tax rate for where you live and register the car, no matter where you buy your car.

 

[Apples]

I don't believe this is correct. Sales and Use tax is essentially the same thing and the same rate. To better explain use tax I'll use this example: when you used to be able to buy things online without paying sales tax, you were technically still responsible for paying use tax on those items to the locale where you reside and use/store whatever you purchased. (Though, no one really did this).

Sales and Use tax is the same rate everywhere is far as I can tell (8.31% in Denver, for example). No matter where you buy the car, you're going to pay the 8.31% if you live in Denver and register the car to your address.

In Aurora, which you mentioned before, the local city (Aurora) sales and use tax rate is 3.75%. On top of that you have the state sales and use tax rate of 2.9%, the county sales and use tax rate of 0.25%, the Greater Denver RTD sales and use tax of 1%, and the random cultural arts etc. sales and use tax rate of 0.1%. I think that results in 8%, essentially. You will have to pay this percentage regardless of where you purchase the car.

Edit to add: I may have this wrong, but as Granger doesn't have nexus in Colorado, they do not have to collect and remit sales tax to Colorado. I don't believe they have to charge you any sales tax if you're from out of state, though they probably can so you can wrap it into financing and then they can give you that amount back, which you'll have to pay when you register the vehicle.

TL;DR - You have to pay the local sales tax rate for where you live and register the car, no matter where you buy your car.

You might be right, and if so it's what I was already planning on so no biggie. The one part I'm not sure about is Auroras sales tax. That tax is only collected by local businesses and I don't believe Arapahoe County would collect it when I register the vehicle. That may just mean I end up having to pay it on my taxes instead. But, if I'm right, the tax bill would end up 4.25%

I'm actually pretty sure you're right on Granger. I seem to recall them saying they won't collect any sales tax but are happy to wrap whatever tax you'll end up owing into the paperwork and cut you a check so you can pay when you register.

 

[jfirwin]

My nearest dealer is Autonation Ford in Littleton, CO. As I have some time (Oct 31st?) to make the switch, I'll be following this thread closely to see how things develop.

For those who have said, "I'll be flying to Granger and driving back", even if there wern't break-in concerns, wouldn't having a transport company pick it up and trailer it back to you, be it Denver, or Utah, or NM, or wherever, be cheaper? Considering airfare, hotel, gas...

 

[Apples]

For reference, the form below has all the applicable municipality tax rates.

https://www.colorado.gov/pacific/sites/default/files/DR1002_07-2020_V2.pdf

 

[jonwithanelcamino]

My nearest dealer is Autonation Ford in Littleton, CO. As I have some time (Oct 31st?) to make the switch, I'll be following this thread closely to see how things develop.

For those who have said, "I'll be flying to Granger and driving back", even if there wern't break-in concerns, wouldn't having a transport company pick it up and trailer it back to you, be it Denver, or Utah, or NM, or wherever, be cheaper? Considering airfare, hotel, gas...

Could be.... but I think a lot of people are making this an experience or wrapping up vacation etc into this.
Pilgrimage to Bronco Town?

 

[Apples]

My nearest dealer is Autonation Ford in Littleton, CO. As I have some time (Oct 31st?) to make the switch, I'll be following this thread closely to see how things develop.

For those who have said, "I'll be flying to Granger and driving back", even if there wern't break-in concerns, wouldn't having a transport company pick it up and trailer it back to you, be it Denver, or Utah, or NM, or wherever, be cheaper? Considering airfare, hotel, gas...

It absolutely would be cheaper to have it shipped. At least in my case, I'm less concerned about the final cost. Before this thread popped up, I had sold myself on a side road trip home through several national parks. I'm still kind of latching on to that, though it may change if it turns out my Bronco won't be ready for pickup until mid winter or something.

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