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NEW YORK STATE SALES TAX: HOW TO DETERMINE RESIDENCY
Exemption for Out-of-State Commuters Customers who commute to New York from another state (New Jersey, Connecticut, Massachusetts, etc.) and purchase a vehicle here are exempt from New York State sales tax, if they meet specific criteria set by the NYSDTF. On their DTF-820 form, they must certify that they: - Are not carrying on any employment, trade, business, or profession in New York State in which the vehicle will be used. (Commuting to and from work does not qualify, on its own.) - Do not intend to register the vehicle in New York State. The dealer must accept the form in good faith. Though if any of the above are found to be false, the dealer is obligated to collect New York State sales tax in the transaction. Civil and criminal penalties may be imposed for misuse of this exemption. - Are not a resident of New York State. - Do not have a place of abode here.
New York dealerships are legally obligated to collect and remit New York State sales tax for any transaction where the customer is a New York resident. Failure to do so can incur drastic financial penalties. Unfortunately, the question of residency is not always clear cut. The State Department of Taxation and Finance’s (NYSDTF) Publication 838 — A Guide for Sales Tax for Automobile Dealers — states that “for Sales tax purposes, an individual is a resident of the state and of any locality in which he/ she maintains a permanent place of abode.” That “place of adobe” can be established in a number of ways: • If a customer wants to register their vehicle in another state, but still holds a NY driver’s license, it’s fair to assume they maintain an abode here. • Vacation homes in NYS also qualify; this includes mobile in-state residences, such as trailers or houseboats. • Students attending college out-of-state are still NY residents, as are military servicepersons stationed out-of- state. NYS sales tax must also be collected when a vehicle is being registered to a business in New York. If a corporation is incorporated under the laws of New York, it qualifies as a New York business. Purchasers who state that they do not reside — even partially — in New York State must confirm this by completing a DTF-820 form (Certificate of Non-Residency of New York State and/or Local Taxing Jurisdiction). If a customer does not complete this form and feels they were taxed in error, they can go online to tax.ny.gov and apply for a refund of overpaid sales tax.
18-10 Whitestone Expressway, Whitestone, NY 11357 • 718.747.0400
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REMINDERS ABOUT VEHICLE INSURANCE CARDS
Dealers must submit vehicle insurance cards with all DMV paperwork, except for title-only cases and duplicated or renewed registrations. The following proof-of-insurance rules are required, per the DMV’s Dealer Plate Issuance Manual: • The effective date that appears on a vehicle’s insurance card must either be later than or the same as the date on its Temporary Certificate of Registration. • The registrant’s name on the insurance card must appear exactly (to the letter) as it does on the MV-82 and the proof of identification that accompanied the application. • If a customer transfers their plates to another vehicle, make sure that the insurance agent adds the notation “Replacement Vehicle” to the new vehicle’s insurance card.
WRONG ADDRESS ON THE REGISTRATION? HERE’S HOW TO CORRECT IT
If a customer never received their vehicle registration, it may be due to an address error in the dealership’s records. To correct this, complete a new MV-82, check the ‘yes’ box next to “Address Change”, and provide the correct information on the address line. The customer must then sign the new form, after which the dealership submits it (along with a clear copy of their driver’s license and a transmittal requesting the address change) to the DMV.
The registration will then be sent back to the dealership, so that the dealership may deliver it to the customer. (There is a $3.00 duplicate registration fee.)
MUST-HAVE PAPERWORK TO SELL A VEHICLE
2: MSO/MCO. The Manufacturer’s Certificate/Statement of Origin is a required document to have in a transaction for tariff purposes, as it confirms the vehicle’s country of origin. 3: LIEN RELEASE. If the dealership is paying off a lien on a vehicle, that vehicle must not be available for sale until the Lien Release (MV-901) has been obtained.
Our office occasionally receives registration requests that are missing vital pieces of information. A dealer cannot sell or offer to sell a car or truck, unless the vehicle in question has all of the following documentation: 1: VEHICLE TITLE. If the dealership acquired the vehicle through a trade-in or from an auction, without a title, a duplicate title must be obtained. The vehicle cannot be available for sale until the duplicate title is in the dealership.
Scenario: You deliver a new car. Your customer brings it home, only to realize their double-wide stroller won’t fit in the trunk. Now they’ve come back to your dealership to return the vehicle. What’s the next step? PROPER PROCEDURE FOR ACCEPTING A “RETURNED” VEHICLE
A customer could choose to return a vehicle for any number of reasons. It could be something as trivial as their spouse hating the color, or as serious as a factory error that the dealership’s staff didn’t catch. (And everything in between.) Whatever the reason, if the dealer decides to take back the vehicle, there are important DMV rules to know. The most important DMV rule is as follows: Once the vehicle has left the dealership, even if it only drives around the block and back, DMV rules obligate you to register and title it. This goes for new vehicles, used vehicles, plate transfers, and dealer plate issuances. If the customer selects a different vehicle from your dealership , the first transaction must be 100% completed and processed (registered and titled) before the plates can be reused. Contact your DMV office, advise them of the situation, and send them the paperwork for both vehicles, so they can complete the first transaction and then immediately process the second one, transferring the plates. If the customer chooses not to take a different vehicle , you still must complete the initial transaction, as noted above. Contact the DMV office that processes your transactions, and send them the paperwork for the returned vehicle, including a note to please surrender the plates and refund the customer’s registration fee. Title fees are not refundable. If the customer has traded in his/her old vehicle and now wishes to trade back for it , you need the following documents in order to transfer the plates back to the traded- in vehicle (again, after the first transaction is completed): • copy of the title • current insurance card • completed MV-82 • copy of the customer’s driver’s license
In all scenarios, GNYADA recommends that dealers ask their DMV office to send the title for the returned vehicle back to the dealership. The DMV often returns this to the customer by default, since they’re the legal owner; however, the dealer must have the title in order to resell the vehicle, and this eliminates the task of having to obtain the title from the customer. We suggest that the customer complete a MV-73 (secure power of attorney), a set of duplicate title papers, a copy of their driver’s license, and a note asking the DMV office to route the title directly to the dealership.
CHECK YOUR SUPPLY OF INSPECTION STICKERS
With 2016 quickly wrapping up, it’s time for dealerships to make sure they are properly stocked with vehicle inspection stickers for the upcoming year. • Supplies of 2017 stickers must last until December 31, 2016. (Any unused 2017 stickers can be returned for a credit toward future orders.) • Be sure you have a supply of 2018 stickers, to start issuing on January 01, 2017. If either of these are running low, now is the time to get an order in. (For 2018 stickers, order a three-month supply at minimum.) Maintaining this supply eliminates the risk of having to send vehicles offsite for inspection, which can add time and hassle to transactions. The earlier orders are placed, the better. Turnaround times are typically a week to ten days, but with the excess mail that comes during the holidays, they’re inevitably a bit longer. Plus, DMV offices are also seldom fully staffed during these times.
With 2016 speeding to a close, we wanted to remind you of the holidays during which DMV-DIRECT and the NYS DMV will be closed. Please plan accordingly, to make sure you have enough supplies of plates, MV-50’s, and inspection stickers.
Thanksgiving Day .
Thursday, November 24th
Christmas Day (Observed) .
Monday, December 26th
New Year’s Day (Observed) .
Monday, January 2nd
News is published by a subsidiary of GNYADA, a not-for-profit organization representing franchised new car dealers in the New York metropolitan area. We are located at 18-10 Whitestone Expressway, Whitestone, NY 11357