Getting away with out-of-state plates

Question: Could you look at the issue of California residents licensing their cars in other states? I know of Californians who live and work in the state but have cars and motor homes that are licensed in Nevada and Montana. How can these people get away with this? The vehicle code is clear that these individuals should have their cars licensed in California, which needs all the tax revenue it can get.

Answer: You’re right. Californians who purchase out-of-state vehicles and then fail to register them here are breaking the law.

Some violators may be people who recently moved here or forgot to register and kept putting it off. But there are others who intentionally keep their vehicle registered in another state to save money on taxes and fees. They also are flouting the state’s environmental laws if they drive vehicles that don’t meet state emission standards.

“This should be of concern to all California residents because you have individuals who are not paying their fair share” of state vehicle taxes and fees, says Peter Welch, executive vice president of the California Motor Car Dealers Assn.

Consider this: If a California resident owns a 45-foot-long, $100,000 recreational vehicle and has it registered in Oregon, the owner would pay just $259 in registration fees over two years. If the same vehicle were registered in California, the owner would pay $666.60 a year in registration fees, more than twice as much, based on information provided by the Oregon and California motor vehicle departments.

After Oct. 1, the registration fee for that vehicle in California would jump to $2,220 a year because the percentage charged on the value of a vehicle purchased will increase from 0.667% to 2% in California.

From July 2001 to June 2002, the most recent figures available, the California Department of Motor Vehicles received 2,000 reports of California residents owning and driving vehicles registered in other states, says DMV spokesman Armando Botello.

“That’s probably the tip of the iceberg,” says David Cavano, manager of automotive services at the Automobile Club of Southern California. Enforcing the law is “almost impossible,” he said, unless violators are stopped by a police officer who discovers the deception or a citizen reports them. In fact, the reports investigated by the DMV and the California Highway Patrol came from law enforcement officers and citizens, Botello said.

As a result of 107 of the investigations into cases in which vehicle owners failed to comply despite notification by the DMV, the California Franchise Tax Board collected $43,000 from scofflaws. Botello noted that the figure does not reflect back registration and license fees paid voluntarily by vehicle owners targeted in the investigations.

The state vehicle code is clear. California residents who buy a vehicle with out-of-state license plates for use in California are required to apply for registration and pay license and registration fees within 20 days of purchasing the vehicle. Failure to do so can result in penalties.

Likewise, people who move to California are required to register their nonresident vehicle with the DMV within 20 days of the date they established residency or accepted employment in the state. But here’s a catch. The DMV rules also state that Californians are prohibited from “importing, purchasing or leasing a new vehicle from another state, unless the vehicle was manufactured for sale in California and the Environmental Protection Agency label certifies the vehicle has California smog equipment.”

A “new vehicle” is any vehicle that has less than 7,500 miles on the odometer at the time it is purchased or acquired, according to the DMV. Essentially, Welch says, even if you bought a new car in Nevada that was not California certified but still passed emission requirements, the DMV would not register it in California.

There are some exceptions. As a California resident, you may register a new out-of-state vehicle certified to federal admission standards if you acquire it as part of an inheritance or a divorce settlement or if you purchase it to replace a California registered vehicle that was stolen, destroyed or inoperative “beyond reasonable repair while out of state.”

Other exceptions pertain to residents in the military and can be found on the DMV Web site at www.dmv.ca.gov.

If the vehicle being brought to California is considered used -- meaning it has more than 7,500 miles on it when purchased -- the owner can get it registered with the DMV. But the car or truck has to meet the state’s emission standards.

The DMV does not know the number of vehicles that are unregistered in the state or how much the state loses in revenue from residents registering their vehicles out of state. But a survey released last year by researchers at UC Riverside found that 3.38% of vehicles in California were not registered in the state from June 2000 to December 2000. It’s not known how many of those unregistered vehicles had been purchased out of state by California residents seeking to avoid California taxes and fees.

Along California’s borders, the percentage of out-of-state and out-of-country vehicles, the study said, reached more than 10%. In Imperial County alone, the percentage of out-of-country vehicles was 19.95%.

The statewide survey, prepared for the state Air Resources Board, was designed to profile vehicles in the state to determine how they relate to auto emission estimates.

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Jeanne Wright responds in this column to automotive questions of general interest. Write to Your Wheels, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012. E-mail: jeanrite@aol.com.