Sales and Use Tax on Motor Vehicles

What every dealer should know about selling or leasing motor vehicles.

Definitions

Motor Vehicle

An automobile, motorcycle, truck, trailer, semitrailer, truck tractor and semitrailer combination, or any other vehicle operated on the roads of this state that is used to transport persons or property and propelled by power other than muscular power. The term includes recreational vehicles, such as motor homes and travel trailers.

Taxable Sales Price

The full sales amount before any deductions are made for federal taxes, freight, handling, delivery, commission, advertising, future free service, or any other expense or cost. Costs for titling, licensing, and registration are not subject to tax if separately stated.

A trade-in that the dealer intends to resell reduces the sales price if the sale and trade occur in one transaction.

Manufacturer rebates are not considered a reduction in the sales price. Tax must be calculated on the taxable sales price before the rebate is deducted.

What is Taxable?

Six (6) percent sales tax must be paid on all new or used motor vehicles sold, leased, and/or delivered in Florida, unless specifically exempted by law. The purchase of a motor vehicle in this state by a resident of another country is taxable at 6 percent.

Who is Exempt?

Here are examples of motor vehicle sales that are exempt from sales and use tax:

• The seller delivers the vehicle outside of Florida.
• A Florida registered motor vehicle dealer purchases the vehicle for resale or lease.
• A Florida registered export/import company purchases a vehicle for resale and will immediately export it outside of Florida.
• A nonresident dealer who does not have a Florida sales tax number purchases a vehicle for resale or lease.
• A nonprofit organization purchases a vehicle and presents a current Florida Consumer's Certificate of Exemption (DR-14) to the seller.

Here are examples of motor vehicle sales that are partially exempt from sales and use tax:

• If a Florida dealer sells a motor vehicle to a resident of another state that imposes a sales tax of less than 6 percent and the purchaser takes possession of the vehicle in Florida, the purchaser's home state tax rate may be applied to the sale. Other restrictions may apply.
  • In order to be eligible for the lower tax rate, the purchaser must give the dealer a completed, notarized Affidavit for Partial Exemption of Motor Vehicle Sold for Licensing in Another State (DR-123). The dealer must keep the affidavit for 3 years.
    Example #1: Residents of North Carolina sign the affidavit and pay no sales tax because their state has no sales tax on motor vehicles.
    Example #2: Residents of Alabama sign the affidavit and pay 2 percent sales tax because Alabama has a 2 percent sales tax rate on motor vehicles.
  • All tax collected must be remitted to the Florida Department of Revenue. The tax should never be sent to the purchaser's home state. For more information, ask Taxpayer Services for a copy of Motor Vehicle Sales Tax Rates by State.
  • If a vehicle is purchased by a nonresident corporation or partnership, tax is due if any officer of the corporation, or any stockholder or partner who owns at least 10 percent of the corporation or partnership, is a Florida resident. However, if the vehicle is removed from Florida within 45 days after purchase and remains out of the state for a minimum of 180 days, the purchasing entity may qualify to pay its home state tax rate, despite the residency of its owners, stockholders, or partners.
• The portion of the invoice that the Veterans Administration pays directly to the dealer on behalf of the veteran.

All exemptions must be properly documented. For more information, contact Taxpayer Services (see "Whom to Call").

Who Must Register to Collect Tax?

If you regularly sell or lease motor vehicles to someone else, you must register as a dealer and collect sales and use tax.

If you lease motor vehicles from someone else for the purpose of leasing to a third party, you are required to register as a dealer and collect sales and use tax. You must present a signed copy of your Annual Resale Certificate in order to lease vehicles tax-exempt.

If you own an out-of-state motor vehicle leasing company and lease any vehicles to persons in Florida, you are required to register as a dealer and collect sales and use tax.

Any out-of-state motor vehicle leasing company wishing to register a leased vehicle in Florida in order to obtain a Florida tag must register as a dealer and collect sales tax on the lease payments. The company must present proof of sales and use tax registration to the tag agency to exempt tax on the acquisition value. If the out-of-state leasing company is not registered with Florida for sales and use tax purposes, tax will be due upon registration of the leased vehicle in this state.

How to Register

You can register to collect and/or report tax via the Department's Internet site. Go to www.myflorida.com/dor and click on e-Services. If you do not have Internet access, you can complete a paper Application to Collect and/or Report Tax in Florida (DR-1). See "For Information and Forms."

After your registration application is approved, you will receive a Certificate of Registration (DR-11), an Annual Resale Certificate (DR-13), and your tax return forms. The Annual Resale Certificate may be used to purchase goods tax-exempt that will be resold in your regular business operations. If the goods purchased for resale are later used (not resold), you must report and pay use tax on those items, plus any applicable penalties and interest. There are additional liabilities for intentional misuse of a resale certificate.

Special Notes

Motor vehicle dealers that operate a vehicle repair facility at the dealership may purchase repair parts tax-exempt by providing suppliers with a copy of their Annual Resale Certificate. When parts are removed from the dealer's inventory to repair a customer's vehicle, the entire charge for the repair (including parts and labor) is subject to tax.

Motor vehicle sales or leases may be subject to the lead-acid battery fee, new tire fee, and rental car surcharge. For more information, ask for a Solid Waste and Motor Vehicle Fees brochure.

No sales or use tax is due on a vehicle that is loaned at no charge by a dealer under any of the following conditions:

• The vehicle is loaned to a person whose vehicle is being repaired, adjusted, or serviced by the dealer providing the replacement vehicle.
• The vehicle is loaned to a high school for use in its driver education and safety program.
• The vehicle is loaned for demonstration purposes, provided that the dealer has obtained a dealer's license plate for the vehicle and has paid the $27 use tax on the plate.

Other loans of a motor vehicle at no charge by the dealer are subject to use tax based on the annual lease value as determined by the Internal Revenue Service's Automobile Annual Lease Value Table.

When is Tax Due?

Returns and payments are due on the 1st and late after the 20th day of the month following the date of sale. For example, if a sale takes place on the 1st of one month, then sales tax is not due until the 1st of the next month.

Penalty and Interest

A taxpayer who files a late return or is late in paying the tax due will be assessed a late penalty of 10 percent of the amount of tax owed, but no less than $50. The $50 minimum penalty applies even if no tax is due. Penalty will also be assessed if the return or payment is submitted on time but is incomplete.

A floating rate of interest applies to underpayments and late payments of tax. The rate is updated January 1 and July 1 of each year by using the formula in section 213.235, Florida Statutes. For current and prior period interest rates, check the Department's Internet site or contact Taxpayer Services.

Reference Material

Tax Laws

Call Taxpayer Services to request a copy of Rules 12A-1.007, Florida Administrative Code, Aircraft, Boats, Mobile Homes, and Motor Vehicles; 12A-1.105, F.A.C., Service Warranties; and 12A-15, F.A.C., Discretionary Sales Surtax. Tax laws are also available on the Department's Internet site. Look for the Florida Tax Law Library.

Brochures

The following brochures are available from your local DOR service center, the DOR Distribution Center, or Taxpayer Services:

• Solid Waste and Motor Vehicle Fees
• Discretionary Sales Surtax
• Repair of Tangible Personal Property
• Recreational Vehicles

For Information and Forms

Persons with hearing or speech impairments may call the TDD at 800-367-8331 or 850-922-1115.

• Order multiple copies of forms from our Internet site, or
• Mail form requests to:
  Distribution Center
  Florida Department of Revenue
  168A Blountstown Hwy
  Tallahassee FL 32304-3761