Automobile manufacturers or distributors will often assign vehicles to their employee representatives for demonstration purposes, sales solicitation, and personal use in the state.
All automotive repair facilities must post a sign, in a place that can be easily viewed by customers, with the following information:
Your customer rightsYou are entitled by law to:
A consignment sale is when the actual owner of a vehicle (the consignor) enters into a written agreement with a dealer (consignee) to sell a vehicle and to act as an agent for the vehicle owner.
Automobile dealers often sell or trade inventory to other dealers for various reasons. Sometimes a vehicle is traded for another vehicle and sometimes it is merely sold to another dealership. Often these "trades" are booked as inventory transfers rather than as sales. Dealer trades differ from accommodation sales.
A demonstrator vehicle is a vehicle provided by dealers to their sales staff, without charge, for any personal or business reason other than (or in addition to) the mere display or test driving of prospective purchasers.
The B&O tax does not apply upon transfer of vehicles to employees or other representatives for their personal use, including demonstration, when no sale occurs.
A driver education vehicle is one equipped with dual controls, loaned to and used exclusively by a school in connection with its driver training program.
The term "school" applies only to:
An executive vehicle is a vehicle regularly used by a dealer or a person associated with a dealership (firm executive, corporate officer, partner, or manager) who does not have a recent model car registered and licensed in his/her own name for personal driving.
Dealers may sell vehicles or trailers to the following types of customers without collecting retail sales tax:
All vehicles purchased by a dealer and placed into inventory carry a surcharge from the manufacturer for interest expense credits. A portion of this surcharge is for the dealer's holdback program and the rest is for the dealer's Wholesale Floor Plan Protection Program (WFPP).
This amount is a credit to the dealer's open account in the month or quarter immediately following the date the vehicle is invoiced to the dealership.
This plan has two options.
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.
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.
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