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HOT TOPICS
2017
MEMBERSHIP
DIRECTORY
96
KEY REMINDERS ON SALES AND USE TAX ISSUES
Mixed-Used Vehicles:
Dealers may compute use tax due on “mixed use” vehicles (i.e. loaner cars, demos used by employees) on 1% of
the cost per month if the vehicle is used:
•
For six months or less with no mileage restriction; or
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For more than six months but no more than one year and
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For less than 15,000 miles.
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If the mileage exceeds 15,000 miles or number of months used exceeds 12 months, FULL sales tax will be
assessed on the cost of the vehicle.
•
Demo log should be maintained reflecting dates in and out of service.
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Use tax will not be due if you state on the sales invoice or other written document provided to the customer
that the sale includes the use of a loaner car.
•
Vehicles held in inventory exclusively for resale but used for demonstration to customers are not taxable if
used solely for demonstration.
Sales of Motor Vehicles to Non-Residents
•
If the vehicle is sold to a non-resident who will register it in New York, sales tax must be collected based on
the rate in effect where the sale occurs.
•
When in-transit permits are used, the vehicle is not subject to New York state and local sales tax.
To claim the non-resident exemption, purchaser must:
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Be a non-resident of New York State.
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Have no permanent place of abode in New York.
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Not be engaged in business, employment or trade in New York.
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Give dealer a completed non-resident affidavit (Form DTF-820).
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Dealer must indicate EXEMPT: OUT OF STATE PURCHASE on the MV-50.
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ANYTIME a buyer resides in a county that is different from where your dealership is located, the customer
must complete a DTF-820.