Florida Criminal Sales Tax Investigations of Auto Dealers: What You Need to Know

If you’re an auto dealer in Florida, a sales tax investigation can do more than just disrupt your business—it can land you in criminal court. The Florida Department of Revenue (FDOR) is increasingly pursuing felony criminal charges against car dealerships it believes have engaged in sales tax fraud.

In this article, we explain what triggers these criminal investigations, what evidence the FDOR looks for, and how to defend your dealership if the state comes knocking.

Why Are Florida Auto Dealers Under Criminal Sales Tax Scrutiny?

Car sales involve large-dollar transactions, complex trade-ins, dealer fees, and financing. These variables create opportunities for underreporting and miscalculations—but they also make it easier for the FDOR to allege intentional fraud.

Common red flags that may lead to a criminal sales tax investigation include:

• Collecting tax from buyers but failing to remit it
• Omitting taxable fees (e.g., dealer fees, repo fees)
• Undervaluing vehicle sales on DR-15S (sales tax returns)
• Reporting sales to DHSMV but not to FDOR
• Altering documents like buyers’ orders, bills of sale, or title apps
• Repeat sales tax delinquencies

From Audit to Arrest: How a Routine Audit Becomes Criminal

The process of a criminal case usually begins like any other tax issue:

1. Audit Notice Issued: You receive a DR-840 notice that the Department intends to audit your dealership’s books and records.
2. Evidence of Fraud Uncovered: If the auditor finds significant discrepancies—such as unreported cash sales or mismatched DHSMV records—the case may be referred to the Criminal Investigations Unit (CIU).
3. Parallel Investigation: CIU investigators begin building a case, often without informing you. They may subpoena your bank records, DHSMV filings, POS transactions, or even interview customers.
4. Criminal Charges Filed: Once they believe they have enough evidence, the Department refers the case to the State Attorney’s Office for prosecution.

The result can be felony charges for theft of state funds, along with arrest, restitution, and license loss.

The Role of DHSMV Reports in Criminal Tax Cases

One of the biggest tools the FDOR uses in auto dealer investigations is the Florida DHSMV database. Every car sale, trade-in, and registration is recorded.

FDOR compares your reported gross sales and taxable amounts on sales tax returns with what was reported to DHSMV. If there are mismatches—for example:

• You reported a $12,000 sale to FDOR but reported $18,000 to DHSMV
• You report only $1.2M in sales to FDOR, but DHSMV records show $2.1M in titled transactions

—then the Department assumes the difference is tax evasion.

These cases are often data-driven and hard to refute without professional help.

Example: How Underreporting Can Become a Criminal Case

Let’s say your dealership sells a car for $25,000. You collect $1,500 in sales tax but only report the sale as $15,000 to the state and remit $900.

The FDOR will say you collected but failed to remit $600, which qualifies as theft of state funds. If this pattern happens regularly, they may allege it was deliberate.

Penalties under Fla. Stat. § 212.15 can be severe, including charges as high as a first-degree felony. Even without jail time, the consequences include restitution, permanent criminal records, and loss of your dealer license.

What Crimes Are Auto Dealers Charged With?

Common criminal charges in these investigations include:

• Theft of State Funds – Fla. Stat. § 206.56 or § 212.15
• Failure to Remit Collected Tax
• Filing Fraudulent Returns
• Scheme to Defraud (Organized Fraud) – Fla. Stat. § 817.034
• Conspiracy

Depending on the facts, these crimes may be charged as felonies up to the first degree. Even if you have no prior criminal history, Florida law allows the Department to pursue serious felony charges, which can result in restitution, permanent criminal records, and loss of your dealership license.

How FDOR Builds Criminal Cases Against Car Dealers

The Department’s Criminal Investigations Unit doesn’t rely solely on paperwork. Their methods often include:

• Comparison of DHSMV data to DR-15 returns
• Subpoenaed bank statements
• Testimony from former employees or customers
• POS and DMS (Dealer Management System) reports
• Review of title applications, buyer’s orders, and tax collected vs. paid
• Analysis of floor plan financing to compare vehicle turnover

This evidence is often paired with interviews and surveillance—building a case designed to show a pattern of intentional underreporting.

What To Do If You’re Under Criminal Investigation

If you suspect your dealership is being criminally investigated:

1. Do NOT talk to investigators without an attorney.
2. Preserve all records—never alter or delete them.
3. Contact a Florida sales tax criminal defense attorney immediately.
4. Do not contact employees or customers who may be witnesses.

Can You Resolve It Before Charges Are Filed?

Yes—in many cases, dealers can resolve the matter civilly before it becomes a criminal case. But time is critical.

If you act early, a tax attorney can:

• File amended returns or disclosures
• Negotiate repayment and penalty abatement
• Dispute the tax owed
• Keep the case out of the criminal system

Once an arrest happens, those options shrink dramatically.

Final Thoughts

If you’re an auto dealer in Florida, don’t take sales tax issues lightly. The FDOR is increasingly turning routine audits into criminal prosecutions, especially when DHSMV records and tax filings don’t line up.

Getting ahead of the problem—and getting professional help—can mean the difference between a tax bill and a felony record.

Need Help?

At Moffa Tax Law, we defend car dealers across Florida from criminal tax investigations. Don’t wait until you’re arrested. Call us for a confidential consultation.