Delay in Receiving Car Title

I leased a car in mid-January as an OR resident. (Oregon has no sales tax.) I paid the lease off almost immediately, before the lessor had the OR title. The Bill of Sale I received from the seller/lessor is date 2/4/19.

The OR title I received from the lessor, on the back of which they’ve signed to release their interest, has a date of issue of 3/14/19.

I did not receive the Bill of Sale nor the title until May 9.

I’m now trying to register the car in my name in WA, a state with sales and use tax. I was told by the Department of Licensing in WA that I will owe the use tax because the car has not been titled in my name in OR for 90 days.

I would’ve titled it in Oregon upon receipt of the title (and then waited 90 days to transfer it to WA) had I received the title from the lessor close to the title date of 3/14. Unfortunately, by the time I received the title on 5/9, it’s too close to the time I’m moving to have it titled in OR, wait 90 days, and then have it titled in WA. Or is it?

(I’m moving throughout the next month, but will be completely out of OR on 6/30.)

Two questions:

  1. Can I legally get the car titled in OR now, then wait 90 days (even though I’ll be living in WA for the majority of those days) and then have the title registered in WA, thereby not having to pay the use tax in WA?

  2. Do I have any recourse against the lessor (Hyundai Lease Titling Trust) for not providing me the title in a timely fashion, thereby potentially causing me to pay a ~$2000 use tax in WA?


  1. There are probably a whole lot of cars on WA roads with OR license plates. You aren’t very likely to be pulled over just because you have out-of-state plates on your car. This would probably work fine.

  2. Your main recourse was to have withheld part of the payment until they could get you the title, but you obviously didn’t do that. Or you could have written a due date for title transfer into the sales contract, you obviously didn’t do that either. May not have much you can do legally now.

I think the only problem with #1 is that you’re required to register your car in WA after being here for 30 days. But, I agree - I almost certainly won’t be pulled over just for that, but it could complicate matters if I get pulled over for some other reason in the interim. (Which, given my driving record or lack thereof, is pretty unlikely.)

As far as #2, I could not get the title sent to me until my lease was paid in full, so withholding payment wasn’t an option. I could’ve had it written into the lease, had I known the difficulties it would cause now. Hindsight, etc.

From my perspective as a tax professional, I believe the general rule for residency in a location is that you have the intent to permanently reside there until conditions change such that you decide to reside elsewhere. So this can go two ways: I can say that immediately when you first spent the night in Washington with the intention of permanently moving to the location you spent the night, you established residency there, and depending on the time frame of that occurrence, you may very well owe use tax. I can also say that you could now “choose” to move back to Oregon, make a token effort to effect that choice, keep some sort of physical place in Oregon as evidence of your residence there (if only a tiny storage unit with one personal item, near a hotel that you’ve stayed at) for long enough to have it titled 90 days there before “choosing” to move back to Washington. I suspect that if you had to plead a case before someone that you actually did live in Oregon that entire time under that set of facts, you would fail miserably, but if no one asked you about the details could at least make a claim you were doing it completely legally.

Or you could just forget about making silly actions to legally justify that you live in Oregon still and claim that you do with absolutely nothing to back it up, and justify it to yourself that you’re morally not required to pay use tax because you did own the car 90 days in Oregon.

Or you could accept that you failed in tax planning. Lots of clients have to do that because they come to us to prepare returns after the fact, when they could have saved a lot of money by consulting with us beforehand, and there’s nothing we or they can do. Even if you knew exactly what was needed to get around the Washington use tax, you did not take enough steps to secure the result that you wanted and cannot legally pin the failure on anyone’s breach of contract that would give you a cause of action to collect from them. Nor would you want to sue a large leasing corporation over $2,000 even if you had a case, since they presumably have lawyers on staff ready to argue how they’re not at fault, and you would have to hire a lawyer that would cost you a significant sum compared to the amount recoverable. And you also would be out the $2,000 until you somehow managed to collect.

Since the OP is looking for legal advice, let’s move this to IMHO.

General Questions Moderator

Ok - thanks for the responses. Appreciated.

This thread can be closed.

I don’t think anyone really cares, at this point, but to close this story:

The WA Department of Licensing, who said that I owed the use tax because the car was not titled in my name for 90 days, was incorrect. I appealed for a Tax Ruling, and the ruling was that the Bill of Sale, combined with the date on which the lessor’s signatory released their interest in the car (both 2/4/19) were more than 90 days before I moved to WA.

Therefore, I had owned the car for long enough prior to moving to WA that I was not required to pay the use tax.

It took many, many phone calls and emails, as well as some driving to a Department of Revenue office and 3 separate trips to the licensing facility, before I had all the necessary paperwork and everyone was in agreement that I didn’t have to pay the $1,800 use tax.

glowacks, I did not fail in tax planning - in fact, while it required some extra work on my part, it worked precisely as I had planned. I’d be disappointed if I came to you as a tax professional and you said, “There’s nothing we can do. You failed.”

Now, this thread can be closed.