SALT Report 2278 – The Florida Department of Revenue has updated their guidance regarding motor vehicle sales tax rates for vehicles sold in Florida to non-residents. Section 212.08(10), Florida Statutes provides a partial exemption for a motor vehicle purchased by a resident of another state. The tax imposed is the amount of sales tax that would be imposed by the purchaser’s home state had the vehicle been purchased in that state; however the tax rate cannot exceed the Florida’s 6% rate.
At the time of sale, the non-resident purchaser is required to complete Form DR-123, Affidavit for Partial Exemption of Motor Vehicle Sold for Licensing in Another State. This form declares the purchaser’s intent to license the vehicle in their home state within 45 days of the date of purchase. If the non-resident purchaser licenses the motor vehicle in their home state within 45 days from the date of purchase, there is no requirement that the motor vehicle be removed from Florida.
The partial exemption for a motor vehicle sold in Florida to a non-resident purchaser will not apply to a non-resident corporation or partnership if:
- An officer of the corporation is a Florida resident,
- A stockholder who owns at least 10% of the corporation is a Florida resident, or
- A partner who has at least a 10% ownership in the partnership is a Florida resident
However, the partial exemption may be allowed for corporations and partnerships if the vehicle will be removed from Florida within 45 days of purchase and will remain outside Florida for a minimum of 180 days, regardless of the residency of the owners or stockholders.
Currently, the states of Arkansas, Mississippi, and West Virginia impose sales tax on motor vehicle purchases, but they do not allow a credit for taxes paid to Florida. Therefore, residents of these states are required to pay sales tax to Florida at the rate imposed by their home state when they purchase a vehicle in Florida. Additionally, when the vehicle is licensed in their home state they will be required to pay sales tax there as well.
As for motor vehicles purchased in another state and brought into Florida, a credit is allowed if tax has been paid to another state. If the amount paid is equal to or greater than the amount imposed by Florida, no additional tax is due. If the amount is less than the amount imposed in Florida, the difference between the two tax rates is due.
The bulletin provides further guidance regarding the sales tax agreements for each US State, US territory, as well as for purchases made in foreign countries for use in Florida.
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