Tax Guide for Motor Vehicle Dealers

New Information: On June 29, 2020, California passed Assembly Bill (AB) 85 (Stats. 2020, ch. 8) and AB 82 (Stats. 2020, ch. 14). Beginning January 1, 2021, certain used vehicle dealers are required to pay the applicable sales tax on their retail sales of vehicles directly to the Department of Motor Vehicles. For more information about new reporting and/or payment requirements for used vehicle dealers, please see our Frequently Asked Questions for Used Vehicle Dealers.

Helping your business succeed is important to the California Department of Tax and Fee Administration (CDTFA). Taxes you collect and pay to the state help fund state and local services and programs important to you and your community. We recognize that understanding tax issues related to your industry can be time-consuming and complicated, and want to help you get the information you need so you can focus on starting and growing your business.

To help you better understand the tax obligations specific to car dealerships, we have created this guide detailing the tax issues and information important to your business.

If you have a repair or service center, you may also want to see our Auto Repair Garages guide.

How to Use This Guide

Each section of this guide contains information relevant to your business. The Getting Started section provides key resources related to registration, filing returns, account maintenance, and other important information you need.

The Industry Topics section covers the most common topics in an at-a-glance format that can be expanded to provide more extensive information if you need it.

The Recordkeeping section covers the common records used and document requirements.

Lastly, the Resources section provides links to a wealth of information, including web-based seminars, forms and publications, statutory and regulatory information, and access to live help from our customer service representatives.

Please note that the information included is general in nature and is not intended to replace any law or regulation.

If You Need Help

If at any time you need assistance with topics included in this guide – or with topics not included – feel free to contact us by telephone or email. Contact information and hours of operation are available in the Resources section.

If you have suggestions for improving this guide, please contact us via email.