RTS In-State California AB85



What You Need To Know

What is this Bill state? Assembly Bill (AB) 85 requires used vehicle dealers to pay applicable sales tax to the Department of Motor Vehicles (DMV) on a per transaction basis within 30 days of the date of sale of the vehicle, instead of quarterly to the California Department of Tax and Fee Administration (CDTFA). When will this begin? Starting January 1, 2021, specified used vehicle dealers must pay the applicable vehicle sales tax when they submit the registration application to the DMV. The dealer must pay the sales tax to the DMV within 30 days of the date of the vehicle sale. If the dealer fails to pay the sales tax, then penalties and interest will be applied. Does this apply to me?: According to the proposed rules set by the DMV, the categories of used dealers that may need to submit sales tax per transaction starting January 1, 2021 include:
  • Used vehicle dealers licensed by the DMV for less than 2 years.
  • Used vehicle dealers who have reinstated their Seller’s Permit after having it cancelled, suspended, revoked or voluntarily surrendered within the last 2 years.
  • Used vehicle dealers who have been discovered by the CDTFA to have understated their tax within the last 2 years.
  • Used vehicle dealers who do not participate in the BPA program.
The DMV is still determining how this bill will roll out to dealers. If they decide to do a phased approach, select dealers who meet the listed criteria will need to comply as of 1/1/2021 and it will roll out to additional dealers through 1/1/2023. If the DMV chooses not to phase the rollout, all dealers who meet the criteria will begin paying tax per transaction on 1/1/2021. Dealertrack is here to help! Be sure to visit our list of KEY INSIGHTS to help you prepare for what’s in store!