Consumer tax collected by dealer as agent
Consumer taxes collected by the dealer as an agent for the federal government are not subject to the business and occupation tax and the retail sales tax. These taxes are calculated BEFORE the federal tax is added.
Examples of federal tax not subject to sales tax
A federal tax not subject to the retail sales or B&O tax is the 5% luxury tax charged on vehicles which cost over $38,000.
Another federal consumer tax is the 12% excise tax charged on certain trucks, tractors, and trailers. As with the luxury tax, the retail sales tax and B&O tax are figured before this tax is added to the selling price as long as they remain consumer taxes.
Business tax on dealer or manufacturer
When the tax is on the business selling the vehicle, such as the gas guzzler tax which is imposed on the manufacturer or importer, the business and occupation tax and the retail sales tax are figured after that tax has been added.
Taxes separately stated
The taxes imposed on the manufacturer, importer, or seller of vehicles may or may not be separately stated on the manufacturer's suggested retail price sticker. In either case, the tax must be included in the amount subject to the B&O and retail sales taxes.
If a dealer has any questions about whether a tax should be included in the "selling price" or the "gross proceeds of sales" for business and occupation tax and retail sales tax respectively, they may call the Department of Revenue at 360-705-6705.