Quiz #14 – Sales and Use Tax

Hint

All Dealers must collect Sales or Use Tax whenever they sell a vehicle to a Consumer and report their sales and taxes collected to the CDTFA monthly. As of January 1, 2023:

• Dealers selling less than 300 vehicles per year must pay the sales taxes collected to the DMV when transferring the title into the Buyer’s name.
• Dealers selling more than 300 vehicles per year must pay the sales taxes collected to the CDTFA monthly.

Hint

Taxable portions of the Conditional Sales Contract include:

• The selling price of the vehicle
• Accessories installed, not included in vehicle price (parts and labor)
• The labor portion of the Smog Fee
• Document Preparation Service Fee

Non-taxable items of the Conditional Sales Contract include:

• DMV fees (license & registration)
• California State Smog Certificate fee