Sales Tax Update on Motor Vehicles Sold in Florida to Out-of-State Residents

Updated TIP #16A01-24 provided by the Florida Department of Revenue states that the law "allows a partial sales and use tax exemption for motor vehicles purchased by a resident of another state. The tax imposed is the amount of state sales tax that would be imposed by the purchaser's home state if the vehicle were purchased in that state; however, the tax imposed must not exceed the Florida 6% tax rate."

The partial exemption for a motor vehicle sold in Florida to a nonresident purchaser does not apply to a nonresident corporation or partnership when:

• An officer of the corporation is a Florida resident
• A stockholder who owns at least 10% of the corporation is a Florida resident
• A partner who has at least a 10% ownership in the partnership is a Florida resident.

Currently, Arkansas, Mississippi, and West Virginia impose a sales tax on motor vehicles but do not allow a credit for taxes paid to Florida. Delaware imposes a fee on the purchase price of motor vehicles but does not allow a credit for taxes paid to Florida. Residents of these states should be informed that when a vehicle is purchased in Florida sales tax must be paid to Florida at the rate imposed by their home state and must also be paid to their home state when the vehicle is licensed there.