(1) The tax applies to the retail sale of
automobiles, trucks, trailers, tractors, and other motor vehicles. The tax
applies to the sales price without any deduction for labor, freight, delivery,
manufacturer rebates, and other charges, except:
(a) Allowance for another motor vehicle taken
in trade (without deduction for liens).
(b) Finance, insurance and interest charges
for deferred payments billed separately.
(c) Cash discounts provided by the selling
dealer and taken at the time of sale.
(2) The tax does not apply to:
(a) Sales of motor vehicles to out-of-state
residents, provided delivery actually occurs in another state and is supported
by a valid Certificate of Exemption-Out Of State Delivery
(Form ST-6); or,
(b) Sales to
nonresident purchasers of motor vehicles, provided such vehicles are
immediately transported to and used in another state in which such vehicles are
required to be registered and supported by a valid Nonresident
Certificate of Exemption Purchase of Motor Vehicle (Form
ST-8).
(c) The dealer's purchase of
motor vehicles, parts, and other resale items sold by a motor vehicle dealer
when a properly executed Certificate of Exemption (Form ST-5)
is provided to the supplier or manufacturer.
(3) Loaner Vehicles.
(a) Any dealer who withdraws a motor vehicle
from inventory for use as a loaner vehicle will be subject to use tax based
upon the daily lease value for each day the vehicle is loaned for no charge.
For purposes of this Rule, a loaner vehicle shall mean a motor vehicle
withdrawn from inventory or separately floor planned, for use by any one person
for a period of time not to exceed 30 days within a calendar year and for which
no charge is made for the use of the motor vehicle. Dealers are required to
maintain adequate records of a motor vehicle's use as a loaner vehicle. The
following table shall be used to determine the daily lease value for all loaner
vehicles. The first column represents the Manufacturer's Suggested Retail Price
(MSRP) including any dealer add-ons and mark-ups, and the second column
represents the corresponding daily lease value.
VEHICLE MSRP DAILY
(including any dealer LEASE
(1) |
(2) |
VEHICLE MSRP (including any dealer add-ons and
mark-ups) |
DAILY LEASE VALUE |
$0 - 999...
|
$ 1.64
|
1,000 - 1,999...
|
2.33
|
2,000 - 2,999...
|
3.01
|
3,000 - 3,999...
|
3.70
|
4,000 - 4,999...
|
4.38
|
5,000 - 5,999...
|
5.07
|
6,000 - 6,999...
|
5.75
|
7,000 - 7,999...
|
6.44
|
8,000 - 8,999...
|
7.12
|
9,000 - 9,999...
|
7.81
|
10,000 - 10,999...
|
8.49
|
11,000 - 11,999...
|
9.18
|
12,000 - 12,999...
|
9.86
|
13,000 - 13,999...
|
10.55
|
14,000 - 14,999...
|
11.23
|
15,000 - 15,999...
|
11.92
|
16,000 - 16,999...
|
12.60
|
17,000 - 17,999...
|
13.29
|
18,000 - 18,999...
|
13.97
|
19,000 - 19,999...
|
14.66
|
20,000 - 20,999...
|
15.34
|
21,000 - 21,999...
|
16.03
|
22,000 - 22,999...
|
16.71
|
23,000 - 23,999...
|
17.40
|
24,000 - 24,999...
|
18.08
|
25,000 - 25,999...
|
18.77
|
26,000 - 27,999...
|
19.86
|
28,000 - 29,999...
|
21.23
|
30,000 - 31,999...
|
22.60
|
32,000 - 33,999...
|
23.97
|
34,000 - 35,999...
|
25.34
|
36,000 - 37,999...
|
26.71
|
38,000 - 39,999...
|
28.08
|
40,000 - 41,999...
|
29.45
|
42,000 - 43,999...
|
30.82
|
44,000 - 45,999...
|
32.19
|
46,000 - 47,999...
|
33.56
|
48,000 - 49,999...
|
34.93
|
50,000 - 51,999...
|
36.30
|
52,000 - 53,999...
|
37.67
|
54,000 - 55,999...
|
39.04
|
56,000 - 57,999...
|
40.41
|
58,000 - 59,999...
|
41.78
|
For motor vehicles with an MSRP of greater than $59,999,
including any dealer add-ons and mark-ups, the daily lease value equals [(.25
times the MSRP of the vehicle including any dealer add-ons and mark-ups) +
$500] divided by 365.
(b)
If any single loaner vehicle is loaned to the same person for more than 30 days
within a calendar year, the dealer shall be liable for use tax based on the
cost price of the vehicle.
(c) The
subsequent sale at retail of such loaner vehicles is taxable based upon the
sales price of the loaner vehicle(s).
(4) When a dealer sets aside a motor vehicle
for demonstration or display purposes, the tax does not apply unless the motor
vehicle is used for more than six months. If used for more than six months, use
tax will apply based upon the cost price of the demonstration or display
vehicle.
(a) The following is a non-exclusive
list of activities that are deemed to be for demonstration or display purposes:
1. The placement of motor vehicles at
shopping malls or other consumer marketplaces to promote the sale of
vehicles.
2. The use of motor
vehicles in parades and at other public events when used to promote the sale of
vehicles.
3. Motor vehicles used by
customers for test drives.
4. The
assigning of motor vehicles to race tracks for display and use as an official
car or pace car, for the purpose of promoting the sale of vehicles.
(b) Motor vehicles used for
demonstration or display purposes may be assigned to an employee that is a bona
fide full-time employee of the dealer when such person works a minimum of
thirty-six (36) hours per week and when such motor vehicle is available for
customer test drives during the dealer's hours of operation.
(c) A dealer who withdraws a motor vehicle
from inventory for demonstration or display purposes must maintain adequate
books and records that reflect the date the motor vehicle was withdrawn from
inventory, the vehicle identification information (VIN#, stock#, etc.), the
cost price of such vehicle, the name(s) of the person or persons assigned to
the vehicle, the employee's position within the organization, the date the
demonstration or display vehicle was taken out of service, and the date the
vehicle was placed back into inventory.
(d) The subsequent sale at retail of such
demonstration or display vehicles is taxable based upon the sales price of the
motor vehicle(s).
(5)
Motor vehicles withdrawn from inventory by a dealer for use as a shuttle or
delivery vehicle, or for personal or company use other than as a loaner
vehicle, as provided for under subparagraph (3)(a), or for demonstration or
display purposes as provided for under paragraph (4), are subject to use tax
based upon the cost price of the motor vehicle at the time the motor vehicle is
removed from inventory.
(6) Repairs
and Maintenance.
(a) When parts or
accessories are installed in a motor vehicle owned by the customer, and the
charge for installation or repair labor is itemized on the dealer's invoice
separately from the charge(s) for the parts or accessories, the charge(s) for
labor are not subject to sales and use tax. If charges for labor and parts or
accessories are not itemized on the dealer's invoice, the entire amount charged
to the customer is taxable.
(b)
Parts used to repair or restore a used motor vehicle to a salable condition are
not subject to sales and use tax when purchased by the dealer, since they are
purchased for resale. The tax collected at the time the used motor vehicle is
sold will include the value of parts installed. However, consumable supplies,
such as cleaners and waxes used in the reconditioning of a motor vehicle for
sale, are subject to sales and use tax.
(c) Manufacturer or Retail Dealer Warranty.
When a motor vehicle is sold at retail, a warranty from the manufacturer or
retail dealer is often included in the selling price. The warranty generally
obligates the manufacturer or retail dealer to correct defects in materials and
workmanship during a specified time frame or after such time frame in certain
instances, such as safety-related recalls, voluntary recalls, and certain
goodwill transactions. When repairs are made under such warranty, no tax is due
since a manufacturer's or retail dealer's warranty was part of the sales price
of the motor vehicle when originally sold. This is true whether the
manufacturer or retail dealer makes the repairs or whether the manufacturer or
retail dealer pays someone else to make the repairs.
(d) Extended Warranty or Maintenance
Agreement. Generally, an extended warranty or maintenance agreement is a
contract to provide repairs or maintenance for a particular item for a stated
period of time after a manufacturer's warranty has expired. The sale of an
extended warranty or maintenance agreement is not taxable provided the charge
for such warranty or maintenance agreement is itemized on the dealer's invoice
to the customer. Parts associated with repairs pursuant to such agreements are
subject to sales and use tax. The dealer is liable for use tax on the repair
parts based on the dealer's cost. However, in the event the dealer charges any
third party for the repair, the dealer must charge sales tax to the third party
as provided for under subparagraph (5)(a) of this Rule and as would apply to
any other retail sale.
(e) Repairs
Made Under Customer Loyalty, Marketing, or other Promotional Programs. Except
as provided for under subparagraph (5)(c) of this Rule, a dealer shall be
liable for use tax at cost price for any part used in a repair, when made at no
charge to the customer, under any loyalty, marketing, or other promotional
program. Examples of such programs include "free tires for life," "free oil
changes for life," and other similar dealer programs.
(f) Tools and Equipment. Tools and equipment
used in the repair of a motor vehicle are subject to sales and use tax when
purchased by the dealer.
(g) Shop
supplies. Most motor vehicle dealers that have a service or repair shop
included in their business usually maintain an inventory of "shop supplies." A
single charge for shop supplies, when separately stated on a dealer's invoice
to the customer, is subject to sales and use tax. Therefore, a dealer may
purchase these items under terms of resale through the issuance of a properly
executed Certificate of Exemption (Form ST-5). However, in the
event a dealer does not separately itemize and charge customers for shop
supplies, a dealer must pay tax on the purchase of such supplies or accrue use
tax on such items.
(7)
The tax does not apply to sales for resale made to out-of-state dealers who
properly execute a Certificate of Exemption-Out Of State
Dealer (Form ST-4).
(8)
Effective Date. This rule shall become effective twenty (20) days after the
Rule is filed in the office of the Secretary of State.