2025 Sales Tax Guide for Auto Dealers in Florida
Auto dealerships in Florida must navigate complex sales tax regulations that apply to vehicle sales, leases, trade-ins, and services. The Florida Department of Revenue (DOR) provides a framework to ensure compliance. Below is an overview of essential sales tax obligations for auto dealers in 2025.
- Sales Tax on Vehicle Sales
- State Sales Tax: Florida imposes a 6% state sales tax on the total purchase price of a vehicle.
- Discretionary Sales Surtax: Counties in Florida may levy an additional surtax, ranging from 0.5% to 2.5%. Dealers must apply the surtax rate based on the buyer’s county of registration.
- Total Tax Calculation: The total tax rate equals the state rate (6%) plus the local surtax rate. For example, a $30,000 car sold in a county with a 1% surtax would incur $1,800 in state tax and $300 in surtax, totaling $2,100.
- Trade-Ins and Taxable Amount
- Trade-In Credits: The value of a trade-in is exempt from tax. For example, if a customer trades in a car valued at $10,000 toward a $30,000 purchase, sales tax applies only to the $20,000 balance.
- Dealer Incentives and Rebates: Manufacturer rebates reduce the taxable amount, but dealer discounts do not.
- Vehicle Leases
- Taxation on Leases: Lease payments are subject to a 6% state sales tax, plus applicable local surtax. Dealers must collect tax on each monthly payment.
- Upfront Tax on Long-Term Leases: For leases exceeding six months, tax on the lease’s total value can be collected upfront.
- Fees and Additional Services
- Documentary Fees: Processing fees for paperwork are taxable.
- Warranties and Maintenance: Extended warranties and maintenance plans are taxable when sold as part of the vehicle transaction.
- Repairs and Parts: Tax applies to parts sold to customers but not on labor if separately itemized.
- Recordkeeping and Filing Requirements
- Record Maintenance: Dealers must keep detailed records of all transactions, including invoices and tax collected, for at least three years.
- Filing Frequency: Dealers generally file monthly sales tax returns using Form DR-15. Deadlines fall on the 1st of the month and are late after the 20th.
- Common Errors and Penalties
- Incorrect Tax Calculation: Using outdated surtax rates can lead to underpayment.
- Failure to File: Late returns incur a penalty of 10% of the unpaid tax, with a minimum of $50.
- Audits: The DOR regularly audits dealerships to verify compliance with tax laws.
- Compliance Resources
- Florida DOR: The Department of Revenue’s website offers detailed guides and forms. Dealers can access updated discretionary surtax rates annually.
- Dealer Associations: Groups like the Florida Automobile Dealers Association (FADA) provide resources, training, and advocacy for dealerships.
For more detailed information or assistance, dealers should consult the Florida Department of Revenue or professional tax advisors. Staying informed about tax law changes ensures compliance and avoids costly penalties.
Additional Articles by the SALTy Orange at Moffa Tax Law:
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Florida Department of Revenue Adopts 2024 Internal Revenue Code – But What are the New FL Tax Credits?
Understanding Florida’s Sales Tax on Services: Implications and Considerations
Jeanette Moffa, Esq.
Phone: (954) 800-4138
Email: [email protected]
Jeanette Moffa is a Partner in the Fort Lauderdale office of Moffa, Sutton, & Donnini. She focuses her practice in Florida state and local tax. Jeanette provides SALT planning and consulting as part of her practice, addressing issues such as nexus and taxability, including exemptions, inclusions, and exclusions of transactions from the tax base. In addition, she handles tax controversy, working with state and local agencies in resolution of assessment and refund cases. She also litigates state and local tax and administrative law issues.
