California – New Resale Certificate Requirement for Dismantlers and Auctioneers

SALT Report 1841 – The California State Board of Equalization issued guidance regarding the new resale certificate requirement for licensed dismantlers and auctioneers. As previously reported in SALT Report 1756, recently enacted legislation states that all sales of vehicles, motorhomes, commercial coaches, and salvage vehicles by dismantlers and auctioneers are considered taxable unless the dismantler or auctioneer receives a resale certificate from someone who is licensed to sell vehicles, vehicle parts, or scrap metal.

New Resale Certificate Guidelines

Dismantlers and auctioneers can only accept resale certificates from the following:

  • Auto dealers,
  • Automotive repair dealers,
  • Dismantlers, and
  • Scrap metal processors

The resale certificate must include all of the required information as well as the license or registration number of the dealer, dismantler, automotive repair dealer, or scrap metal processor providing the resale certificate.

If the purchaser is not required to hold a California seller’s permit, the purchaser must fill out line 1 of the resale certificate and provide the reasons the purchaser is not required to hold a seller’s permit. The BOE is currently creating a new resale certificate for dismantlers and auctioneers, but until that time, auto dealers, dismantlers, repair dealers, and scrap metal processors who wish to purchase vehicles from dismantlers and auctioneers must use the resale certificate form found in Regulation 1668.

For Further Information:

California State Board of Equalization – Special Notice L-333

Revenue and Taxation Code section 6092.5

SALT Report 1756 – Accepting Resale Certificates for Salvaged Vehicles in California