i'm going to be starting a job in a dealership ie cars and bikes. Can anyone give me the 101 on calculating

Question

and verifing the sales tax. I'm not a total idiot, but I haven't done Sales & use tax in a few years and don't remember. Also do dealership pay sales tax on the inventory they buy from the manufacturer? and do we have to pay if it's from another state. I'm in WI. If anyone knows of a site that step by steps this please let me know. Thank you!

Answer 1

You'll need a license from your state to collect sales tax.

Many states will give you a chart showing the sales tax on various amounts so you don't have to calculate it. But if for example your sales tax is 6% - since 6% - .06, multiply the price of the item you're selling by .06 to get the sales tax, then add it to the item price to get the amount the buyer should pay you.

You don't pay sales tax on items you buy for resale, so no you won't pay sales tax to the manufacturer on items you're going to sell. That should all be detailed in the info you receive from your state when you get your sales tax license.

Since it's cars and bikes (I assume you mean motorcycles, not bicycles) you'll also be dealing with registration papers for the state for the items sold. If you sell to a buyer in another state, you won't collect the sales tax, they'll pay it when they register the vehicle in their state.

Good luck.

Answer 2

Most of the time, dealers don't deal with sales tax at all. Sales or Use tax is usually collected directly by the DMV when the customer registers the car. If the dealer does courtesy tagging for the customer, they calculate the taxes and fees, add them to the loan, and cut a check to the DMV to cover them. Most dealers have automated sales systems that handle all of the calculations for them.

Items bought for resale are never subject to sales tax, so the dealer does NOT pay any tax when they purchase the vehicle. If they place it in service for their own use, the tax would then be due and would be paid directly to the DMV in the same manner as any customer would do.