Utah – Sales Tax Publication for Vehicle Dealers and Repair Shops

2/21/2013

SALT Report 2172 – The Utah State Tax Commission updated their sales tax publication for vehicle and watercraft dealers and body or repair shops. The publication discusses the requirements for collecting and remitting sales tax that are specific to these businesses.

Generally, any sales tax due on vehicle sales by vehicle dealers must be paid with the dealer’s sales and use tax return, on or before the due date. When a vehicle is sold by a dealer, neither the dealer nor the customer should pay sales tax to the Division of Motor Vehicles. Instead, Utah law requires that the sales tax be collected by the dealer and paid to the Tax Commission with the dealer’s sales and use tax returns. However, those purchasing a vehicle from someone other than a licensed vehicle dealer must pay any sales tax due directly to the DMV.

Businesses that repair and service vehicles are not required to pay tax on sales of items that become an ingredient or component part of the customer’s vehicle. For instance, purchases of lubricants, welding rods, paint, wax and lacquers used in painting or polishing vehicles, body filler, repair parts, sublet repair labor, paint hardener and rust preventatives are non-taxable.

In addition, the publication addresses the taxability of leases, demonstrator vehicles, courtesy delivery, towing, repossession credits, sales tax refunds upon repurchase, vehicle purchases and leases by Native Americans, vehicle resale, and provides a list of taxable and exempt items.

For Further Information:

Utah State Tax Commission – Publication 5