SPECIAL CIRCUMSTANCE SALES

You must be prepared to make tax adjustments in some situations. License fees collected are not taxed, except when…

the fees collected exceed the amount required by the DMV, the excess is taxed. a vehicle is accepted for trade and sold, the fees paid in advance are taxed.

* If the dealer pays these fees in advance, they are not taxed.

Accessories and labor, when performed before delivery to the buyer are taxed. Document preparation charges are taxed.

Sales commissions paid from proceeds are not deducted from the taxable amount. When financing & insurance are not itemized on the contract, the total is taxed.

Smog inspection fees are taxed, certificate fees are not taxed.

When a dealer allows an accommodation sale, where an employee or salesperson displays a personal car for sale, AND a conditional sales contract or DMV report of sale is used, the sale is taxed.

When a dealer conducts a consignment sale, the sale is taxed.

When a dealer sells to a member of the military, the sale is taxed unless:

The buyer has a valid military ID, out of state DL, and transfer orders placing him / her in California for military service.

When a dealer sells to a foreign diplomat, the sale is taxed unless:

The buyer produces an identification letter from the Office of Foreign        Missions or a valid tax exemption card, issued by the US Dept. of State.

When a dealer sells to a US government agency or the American Red Cross the sale is not taxed.

When a dealer sells to a handicapped person, receiving special parking privileges per 22511.5 CVC, that portion attributed to modification is not taxed.

When a dealer sells a handicapped modified vehicle for public or private transport, that portion attributed to modification is not taxed.

When a dealer sells a company or demonstration vehicle, the sale is taxed. When a dealer purchases a service or company vehicle, the sale is taxed.