SALT Report 1756 – The California Assembly recently passed a bill that limits who can purchase salvage certificate vehicles with a resale certificate. Currently permit holders are able to purchase salvage certificate vehicles with a resale certificate and in many cases they do not report any subsequent sales of vehicles. This bill eliminates the opportunity to avoid paying sales and use tax by permit holders that are not licensed dealers.
Therefore, effective January 1, 2013, licensed auto dismantlers and auto auctioneers will be prohibited from accepting resale certificates from purchasers of vehicles, mobile homes, and commercial coaches, unless the purchasers are licensed dealers, dismantlers, auto repair dealers, or scrap metal processors.
Further, AB 2618 provides that anyone selling any of the following is presumed to be making a sale at retail and not a sale for resale:
- A mobile home or commercial coach that is required to be registered annually under the Health and Safety Code,
- A vehicle required to be registered under the Vehicle Code or subject to identification under the Vehicle Code,
- A vehicle that qualifies under the permanent trailer identification plate program pursuant to the Vehicle Code, or
- Any salvage certificate vehicle as defined in the Vehicle Code
This presumption may be rebutted by accepting a resale certificate from any of the following:
- A person that certifies they are licensed, registered, regulated, or certificated under the Health and Safety Code or the Vehicle Code as a dealer or dismantler,
- A person that certifies they are licensed, registered, regulated, or certificated under the Business and Professions Code as an automotive repair dealer or is qualified as a scrap metal processor as described in the Vehicle Code, or
- A person that certifies they are licensed, registered, regulated, certificated, or otherwise authorized by another state, country, or jurisdiction to do business as a dealer, dismantler, automotive repairer, or scrap metal processor
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