Skip to Content
Call Us Today! 888-444-9568


New cars


If you are a new or used car dealer in Florida, then you should be reviewing your sales tax procedures. This is because the Florid Department of Revenue started a statewide audit campaign on the car dealer industry in 2014 that will last several years. Even if you think everything is perfect, I strongly suggest you spend an hour or two reviewing how you handle Florida sales tax. We are getting several calls a week now from car dealers that are getting nasty little walk up calls from the Florida Department of Revenue. Many of these dealers are in the middle of a sales and use tax audit when they find out their personnel do not have a complete understanding of what documentation is required to protect the dealership on audit. Sure, you might be remitting every penny of sales tax you collect – but the car sales that you thought were tax exempt can often be just as dangerous as the one you collected tax on. If you let someone drive away without paying 100% of the sales tax, then you risk your dealership becoming liable for the sales tax.

Stop and think for a minute – If you added up all your exempt sales over the last 3 years then multiplied that amount times the sales tax rate – just how big would that number be? Sure – you think you have a resale certificate on file, but is that enough? If that dealer was from outside Florida, the answer is no it is not enough. Have you considered your auction sales too? Do you have any resale certificates for your auction sales? Most car dealers don't. It should scare the pants right off the entire car dealer industry to know that the Department of Revenue is considering whether there is any statutory or administrative rule that would allow auction sales not to have the same documentation requirements as a non-auction sale. Let me tell you - there is nothing that specifically exempts auction sales other than the fact auditors have generally ignored them – until now. Below are links to articles about the various types of paperwork you need to exempt a car from sales tax in Florida. Even if you are sure your dealership is squeaky clean for sales tax, it is still worth a review just in case.

If phone calls from the car dealers to our firm are not about a paperwork issue on audit, then they are about a criminal investigations by the Florida Department of Revenue. That's right – there are serious criminal implications for sales tax fraud Florida and the FL DOR has a department filled with well-trained investigators whose sole job it is to hunt down companies that collected but did not remit sales tax. It only takes $301 of collected but not remitted sales tax to become a 3rd degree felony punishable by up to 5 years in jail and $5,000 in fines. Just how hard do you think it is for the FL DOR to get a list of all your sales from the DMV, with sales tax included? When they compare this information to the sales tax return you filed, any underreporting stands out like big blinking sign that says "arrest me." And yes – they do arrest people regularly for sales tax fraud. As of June 2014, there were 12 arrests of car dealers advertised on the FL DOR's web site for the year. I've seen people get hauled in by the sheriff's office for as little as $1,500 in sales tax. If you or anyone you know has sales tax underreporting problems, then there are ways to most likely get the matter cleared up before it reaches the point of charges being filed for sales tax fraud. Just make sure not to believe that investigator is there to help you…. There are several articles below about specific sales tax arrests in Florida.

At the Law Offices of Moffa, Sutton, & Donnini, P.A., almost our entire law firm is dedicated to fighting the Florida Department of Revenue on sales and use tax matters. We have helped 100+ car dealers around the state fight back against the aggressive tactics used by what we refer to as our draconian comrades in Tallahassee. We hear all too often auditors that tell car dealers that certain documentation will not be accepted after the fact. This is rarely true. Either the auditor has been trained poorly or (s)he just wants to close out the audit without having to wait for you to spend weeks trying to get the right paperwork signed after the fact. Knowing your rights during a sales tax audit or criminal investigation can make all the difference in the world in defending your car dealership. But the best defense in the world is doing everything right in the first place. Our law firm offers very liberal free initial consultations. Call our offices today to take advantage of the free consult to discuss how your car dealership handles sales tax. If you are doing everything right, then great! If not, then we can help get you on the right track and even how to reduce the chances of audit going forward. What have you got to lose?

Florida sales tax attorney; Florida sales tax audit; Orlando sales tax attorney; orlando sales tax audit; Naples sales tax attorney; Gainesville sales tax attorney; Tampa sales tax; Car dealer sales tax audit

About the author: Mr. Sutton is a Florida licensed CPA and Attorney and a shareholder in the law firm the Law Offices of Moffa, Sutton, & Donnini, P.A. Mr. Sutton's primary practice is Florida tax controversy, with an almost exclusive focus on Florida sales and use tax. Mr. Sutton worked for in the State and Local Tax department of one of the Big Five accounting firms for a number of years and has been an adjunct professor of law at Stetson University College of Law since 2002 teaching State and Local Tax and at Boston University College of Law since 2014 teaching Sales and Use Tax. Mr. Sutton is a frequent speaker on Florida sales and use taxes for the FICPA, Lorman Education, NBI, and the Florida Society of Accountants. Mr. Sutton is also the State and Local Tax Chairman for the American Association of Attorney – Certified Public Accountants. You can read more about Mr. Sutton in his firm BIO HERE.


FL SALES TAX – RESALES TO OUT OF STATE DEALERS, published on September 19, 2014, by James Sutton, CPA, Esq.

FL SALES TAX ON USED CAR DEALERS – WHAT IS TAXABLE? Published on July 22, 2014, by Matthew Parker, Esq.

FL SALES TAX FRAUD – 12 USED CAR DEALERS ARRESTED, published on July 12, 2014, by James Sutton, CPA, Esq.

FL CARS DEALERS: GEORGIA SALES TAX ON CARS IS NOW ZERO!, published Jan 1, 2014, by James Sutton, CPA, Esq.

ORLANDO USED CAR DEALER ARRESTED FOR SALES TAX, published July 13, 2013, by James Sutton, CPA, Esq.

CLOSE A BUSINESS TO AVOID LARGE SALES TAX ASSESSMENT?, published July 7, 2013, by James Sutton, CPA, Esq.

BOAT CAR PLANE DEALERS: FL SALES TAX FORMS, published June 14, 2013, by Jerry Donnini, Esq.