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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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125.0000 Automobile Dealers and Salesmen—Regulation 1566
Annotation 125.0040
125.0040 Dealer Document Processing Charges and Electronic Registration and Transfer Charges. Civil Code section 2982, subdivision (a)(1), requires new and used car dealers to disclose certain charges with respect to the sale or lease of a new or used motor vehicle, some of which are subject to sales or use tax and some of which are not. As is relevant here, the document processing charge that the dealer charges its customers for preparation and processing of documents, disclosures, and titling, registration, and information security obligations is included in the dealer's gross receipts or the sales price of the vehicle and is subject to sales or use tax. Conversely, the electronic filing charge, including the DMV transaction fee, that the dealer passes on to its customers for providing electronic registration or titling services is not included in the dealer's gross receipts or the sales price of the vehicle and is not subject to sales or use tax because these services remain optional, even after the recent enactment of Vehicle Code section 4456.4. 3/28/12.