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The use tax is assessed at the sales tax rate in effect in the county in which the seller had registered the automobile. In other words, if the seller had registered in Orange County, the applicable use tax rate is equal to the Orange County sales tax rate.
As of 2013, California sales tax varies by county from around 7.5 percent minimum to 10 percent maximum. Some cities sales tax varies within their respective county as well. For instance, Camarillo residents pay a sales tax rate of 7.5 percent while Oxnard residents pay a sales tax rate of 8 despite the fact both cities are in Ventura County.
Automobile sellers must report the sale to the California Department of Motor Vehicles within five days of the transaction. Automobile buyers must notify the California Department of vehicles of the change of ownership within 10 days of the transaction.
The automobile buyer then has 30
days to pay the applicable fees and the automobile use tax. If the buyer fails to pay the applicable fees within the 30-day period, then the California Department of Motor Vehicles may assess additional automobile use tax penalties.
Four types of transactions are exempt from the automobile use tax. First, if a parent, child, grandparent, grandchild, domestic partner or sibling, transfers a vehicle between one another, then the transaction is exempt. Second, if the vehicle transfer is a gift with no party giving consideration for the other in exchange for the vehicle, then the transaction is exempt. Third, if a court orders the vehicle transfer, no use tax is required. Finally, if the vehicle is transferred as part of an inheritance, then no use tax is required. These exemptions do not apply when the transferee is a commercial automobile seller.
To determine how the facts of your situation apply to California law, consult a qualified attorney licensed to practice law in the State of California.