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Welcome out of state car buyers


Just wanted to give everyone a heads up concerning something that is popping up on car dealer audits lately, specifically concerning sales from a Florida car dealer to an out of state car dealer. The impact could be significant, so I wanted to make sure you guys/gals are aware of it before the auditor comes knocking.

Some car dealers, particularly used car dealers, sell a lot of cars to other dealers at auction and otherwise. Many of these dealer/purchaser's are not registered to be a dealer in Florida - so they cannot give the selling dealer a Florida resale certificate. What many dealers have been doing in practice is to get a copy of the out of state dealer's non-Florida resale certificate for the deal jacket. Many auditors have been accepting this as proof that it was was a sale for resale - so the practice of merely getting an out-of-state resale certificate is pervasive in the industry. Alternatively, if the sale is made via an auction house, then most dealers have not even worried about the resale certificate.

Here's the issue that has been coming up. Rule 12A-1.007(6)(b) provides that you can exempt a sale of a vehicle to an out-of-state dealer, but only if the purchaser signs a notarized affidavit saying that they are purchasing the car for sale out of state and only for that purpose. Many dealers are not aware of this rule and have not been getting this affidavit. Almost no one gets this affidavit if a car is sold through the auction house. This has been popping up lately with a very substantial effect on the tax assessments.

Since the DOR just started a statewide campaign on car dealers, we expect this issue to be surfacing all over the state. We've pushed the issue pretty far up the chain within the DOR to see if we can get a consistent answer on how this is going to be handled on audits. I don't have a solid answer for everyone yet, but the conservative answer for now is to follow what the Rule says to do - just in case. I will share the information when we get more complete answers. In the meantime, those of you are a car dealer or have car dealer clients, then you should consider inquiring about how sales to out of state dealers are being handled.

Tampa sales tax attorney; Tampa sales tax audit; Orlando sales tax attorney; Orlando Sales Tax Audit; Miami sales tax attorney; Miami sales tax audit; FL car dealer sales tax

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.


Rule 12A-1.007, Florida Administrative Code



FL SALES TAX AUDITS ON USED CAR DEALERS - WHAT IS TAXABLE?, published July 22, 2014, by Matthew Parker, Esq.

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

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