FAQs - Sales & Use Tax: Motor Vehicles & Watercraft

Does a dealer title a "parts truck" and pay tax when the title is issued?

When a dealer removes a vehicle from inventory (or purchases a vehicle from another dealer) and utilizes the vehicle as a “parts” vehicle, the dealer should title the vehicle in the dealer’s name and remit sales and use tax on the dealer’s acquisition cost. If the dealer purchased the vehicle, the “price” upon which sales tax is calculated is the purchase price. If the dealer acquired the vehicle through trade, the “price” upon which tax is calculated is the value of the trade-in allowance granted when the vehicle was acquired.