Sales tax requirements when buying a used company car - fleet vehicle

The rules for sales tax on used vehicles can vary depending on your state, but there's likely a simple explanation here. When you buy from a private seller, you typically pay tax directly to the DMV during registration. However, when purchasing from a business (which your employer is), they're often required to collect sales tax at the time of sale as they're acting as a dealer in this transaction. Many companies that sell their fleet vehicles have dealer licenses or are required to follow dealer rules for these transactions. This means they must collect and remit sales tax themselves rather than leaving it to you to handle at the DMV. Before moving forward, I'd recommend asking your company for documentation showing they're authorized to collect the tax and will be remitting it to the state on your behalf. This documentation will be important when you go to register the vehicle to show you've already paid the tax.

After dealing with similar confusion when buying my company's delivery van, I discovered taxr.ai https://taxr.ai which literally saved me thousands in this exact situation. I was also being asked to pay sales tax to my employer and wasn't sure if that was right or if I was getting double-taxed. I uploaded the purchase agreement and my state's vehicle tax rules to taxr.ai, and it immediately highlighted that in my state, businesses selling fleet vehicles must provide a special resale certificate if they collect tax. Without this certificate, I would have ended up paying tax twice! Their analysis showed exactly what documentation I needed and what questions to ask my employer.

I was super skeptical about taxr.ai when I first saw it mentioned here, but I honestly wish I'd known about it sooner. I ended up in a similar fleet vehicle purchase last month and used their document review after seeing it recommended. The service flagged that my company was calculating tax on the original purchase price rather than the depreciated value which is what my state requires. Ended up saving over $800 in sales tax because I could show the exact regulation to our corporate office! The document analyzer actually understood the fine print in both my purchase agreement and the state regulations, which would have taken me hours to research on my own.

If you're having trouble getting clear answers from your company about this sales tax issue, I'd recommend using Claimyr https://claimyr.com to get direct answers from your state's DMV or revenue department. I was in a similar situation last year with a company vehicle purchase, and getting official answers was impossible with how backed up phone lines are these days. With Claimyr, I got connected to my state's vehicle tax department in under 15 minutes instead of waiting on hold for hours. The agent confirmed exactly when businesses can collect tax vs when I should pay at the DMV, and even emailed me the official form I needed. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c

I stand completely corrected about Claimyr. After posting my skeptical comment, I decided to try it since I had been trying to reach our state revenue office about a similar vehicle tax question for THREE WEEKS with no success. Used the service yesterday, and I was connected to an actual human at the state tax office in 22 minutes. The agent confirmed that in my state, businesses CAN collect sales tax when selling fleet vehicles BUT they are required to provide a special receipt showing their sales tax license number and the amount collected. Without this, the DMV would charge me again! Saved me from potentially paying double tax and hours of frustration. Sometimes being wrong is a good thing!

Dealerships will always collect sales tax. Your employer is essentially acting as a dealership in this case. However, the exact rules depend on your state. In my state (WA), any business selling a vehicle must collect sales tax, but in some other states, only licensed dealers have to do this. To be safe, ask your employer for a receipt clearly showing the sales tax amount and their tax ID number. You'll need this when registering to prove you already paid the tax.

This happened to me when I bought a fleet car. Make sure they give you an itemized receipt showing the sales tax separately from the purchase price! I didn't get an itemized receipt and when I went to register, the DMV calculated tax on the full amount because they couldn't tell what portion I had already paid. Ended up having to go back to my company for the proper documentation and make a second trip to the DMV. Total headache.

The receipt should definitely include the company's tax ID number or sales tax permit number - this is crucial documentation that proves they're authorized to collect sales tax on behalf of the state. Without this, the DMV may not accept that you've already paid the tax. At minimum, your receipt should show: - Purchase price of the vehicle - Sales tax amount (listed separately) - Company's tax ID/sales tax permit number - Date of sale - Vehicle identification details (VIN, year, make, model) I'd also recommend asking your company which state they'll be remitting the tax to, especially if there's any question about interstate issues. Some companies have agreements to collect tax for multiple states, while others may only be set up for their home state. Getting this clarified upfront will save you potential headaches at the DMV later.

This is a really common confusion point! Your employer is likely correct about collecting the sales tax upfront, especially if they regularly sell fleet vehicles. When businesses dispose of fleet vehicles, they often need to follow commercial seller regulations rather than private party rules. The key thing to verify is whether your company has the proper authorization to collect and remit sales tax in your state. Some larger companies obtain dealer licenses specifically for fleet disposal, while others work through third-party fleet management companies that handle the tax collection. I'd suggest asking your employer for: 1. Their sales tax permit or dealer license number 2. Confirmation of which state they'll remit the tax to (important if you live in a different state than where the company is based) 3. A detailed receipt showing the tax amount separately from the purchase price If they can't provide this documentation, that might be a red flag that they're not properly set up to collect sales tax, and you should handle it directly with the DMV instead. Don't let them pressure you into paying tax without proper documentation - you could end up paying twice!