Could a Florida wholesale motor-vehicle dealer register and plate a vehicle held for resale without triggering sales or use tax?

Plain-English summary

Florida refused to authorize tax-free regular license plates for vehicles held in a wholesale dealer's resale inventory. Licensing, titling, or registering the vehicle triggered use tax because Chapter 212 contained no express or implied exemption for the arrangement.

Wholesale dealers could not use interchangeable dealer plates and could issue no more than two 30-day temporary tags for the same vehicle. That created a practical problem when extensive reconditioning took longer than 60 days and the vehicle needed to travel to repair shops, parts stores, auctions, or other dealers.

The Department acknowledged those facts but found they did not create a tax exemption. Keeping the vehicle in resale inventory and offering it for sale after reconditioning did not allow the dealer to obtain a regular plate without tax.

What this means for you

Wholesale motor-vehicle dealers

Registering an inventory vehicle is different from using an interchangeable dealer plate. Under this ruling, a regular title, license, or registration for the vehicle creates use-tax consequences even if resale remains the ultimate plan.

Reconditioning and logistics teams

Long repair timelines and temporary-tag limits did not change the tax result. Plan transportation and registration choices with those limits in mind.

Accountants and tax professionals

Do not treat resale-inventory status alone as an exemption from the tax-documentation requirement tied to vehicle title, licensing, and registration.

Common questions

Q: Could the wholesale dealer obtain a regular plate tax-free?
A: No.

Q: Did it matter that the vehicle remained in inventory and was offered for resale?
A: No. The Department still found that licensing, titling, or registration triggered use tax.

Q: Why did the dealers request regular plates?
A: Wholesale dealers could not use dealer plates, and the law allowed no more than two 30-day temporary tags for the same vehicle while lengthy reconditioning could exceed 60 days.

Q: Did the Department find an exemption anywhere in Chapter 212?
A: No express or implied exemption applied to the stated facts.

Q: Can another dealer rely on this TAA?
A: Not automatically. The advisement states that it binds the Department only under the facts and circumstances described in the request, and later legal changes or judicial interpretations may produce a different result.

Citations and references

• Fla. Stat. § 212.06(10) — tax evidence required before a vehicle title, license, or registration may issue
• Fla. Stat. § 320.27(1)(c)3. — wholesale dealer restriction on dealer plates
• Fla. Stat. § 320.131(2) — 30-day temporary tags and two-tag limit
• Fla. Admin. Code r. 12A-1.007(8) — motor-vehicle tax treatment cited in the advisement heading
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96A-053

Original ruling text

Nov 22, 1996

Re: Technical Assistance Advisement 96A-053
Sales and Use Tax - Registration of Motor Vehicles Held in
Inventory for Sale by Wholesale Motor Vehicle Dealers
s. 212.06(10), F.S., and Rule 12A-1.007(8), F.A.C.
Parties: XXXX (Herein "the Association") Wholesale Motor
Vehicle Dealers Who are Members of the
Association (Herein referred to individually as
"Member" or collectively as "the Members")

Dear :

This response is in reply to your May 23, 1996, petition for the
Department's issuance of a Technical Assistance Advisement
("TAA") pursuant to s. 213.22, F.S. Your petition regards the
referenced matter and parties. The Department has carefully
examined your petition and finds it to meet the criteria set
forth in Chapter 12-11, F.A.C., requisite to issuance of a TAA.
Therefore, the Department is by this response issuing the
requested TAA.

DISCUSSION OF FACTS

Your petition imparts the following background information
relative to the issue under advisement herein:

Wholesale motor vehicle dealers are licensed by the
Department of Highway Safety and Motor Vehicles. These
dealers are only authorized to buy from or sell to licensed
motor vehicle dealers or auctions. Wholesale dealers may
not sell motor vehicles at retail.

Unlike other motor vehicle dealers, a wholesale motor
vehicle dealer is specifically prohibited from using dealer
license plates (s. 320.27(1)(c)(3), F.S.). Dealer license
plates are used on vehicles owned by the dealer which are
part of the dealer's inventory and are being offered for

sale. Dealer license plates may also be used when the
vehicle is being operated in connection with a dealer's
business (e.g., transporting vehicles to and from auctions,
other dealerships and repair facilities; allowing potential
buyers an opportunity to test drive the vehicle). Each
dealer license plate is interchangeable on any vehicle
owned by the dealership which is part of the dealer's
inventory and which is being offered for sale. Since these
license plates are not assigned to any particular vehicle
but are assigned to the dealership to be placed on vehicles
for resale, no sales tax is due when these license plates
are purchased.

When a wholesale motor vehicle dealer transports a motor
vehicle to and from auctions and motor vehicle dealership
locations, the wholesale motor vehicle dealer must use
Temporary Tags, as authorized by s. 320.131, F.S.

A significant number of wholesale motor vehicle dealers
recondition vehicles prior to reselling them. In some
cases, especially those involving high priced vehicles
(e.g., Jaguars, Porsches, etc.), the reconditioning process
can be quite extensive and lengthy. During the
reconditioning phase, the wholesale motor vehicle dealer
must test drive and transport the vehicle to various body
shops, repair facilities, parts stores, etc. Although the
vehicle may not yet be fully reconditioned, the vehicle is
nonetheless part of the wholesale dealer's inventory and is
being offered for sale upon completion of the
reconditioning process.

Sometimes this process may take 90 or more days to
complete. In such cases, the wholesale dealer loses the
authorization to transport the vehicle as needed. The
reason for this is found in s. 320.131(2), F.S., which
authorizes the sale and use of temporary tags. This
section specifically states:
"... A temporary tag shall be valid for 30 days, and no
more than two shall be issued to the same person for the
same vehicle." Therefore, a wholesale motor vehicle dealer
has no lawful means by which to transport any vehicle

remaining in its inventory for a period longer than 60
days.

An official of the Bureau of Titles and Registrations,
Division of Motor Vehicles, Department of Highway Safety
and Motor Vehicles (DHSMV), was contacted regarding this
problem. When asked if the department would allow a
wholesale motor vehicle dealer to purchase a regular
license plate, strictly for the purpose of placing it on a
vehicle for resale, without collection of sales tax, the
response was "no". The official did state, however, that
should a ruling from the Department of Revenue allow DHSMV
the authority to sell regular license plates under these
conditions, they would reverse their position.

REQUESTED ADVISEMENT

You request the following of the Department:

It is respectfully requested that the Department of Revenue
issue a Technical Assistance Advisement which would
authorize the Department of Highway Safety and Motor
Vehicles to issue regular license plates to wholesale
dealers to be placed on vehicles which are part of their
inventory and are being offered for sale, without the
requirement to collect sales tax.

DISCUSSION OF LAW

Section 212.06(10), F.S., provides in relevant part the
following:
(10) No title certificate may be issued on any boat, mobile
home, motor vehicle, or other vehicle, or, if no title is
required by law, no license or registration may be issued
for any boat, mobile home, motor vehicle, or other vehicle,
unless there is filed with such application for title
certificate or license or registration certificate a
receipt, issued by an authorized dealer or a designated
agent of the Department of Revenue, evidencing the payment
of the tax imposed by this chapter where the same is
payable. For the purpose of enforcing this provision, all

county tax collectors and all persons or firms authorized
to sell or issue boat, mobile home, and motor vehicle
licenses are hereby designated agents of the department and
are required to perform such duty in the same manner and
under the same conditions prescribed for their other duties
by the constitution or any statute of this state. All
transfers of title to boats, mobile homes, motor vehicles,
and other vehicles are taxable transactions, unless
expressly exempt under this chapter. (Emphasis Supplied)

Chapter 212, F.S., does not contain any express or implicit
exemption from sales or use tax for the licensing, titling, or
registration of a vehicle under the instant facts and
circumstances.

CONCLUSIONS OF LAW

In view of the fact that s. 212.06(10), F.S., does not contain
any express or implicit exemption from sales or use tax for the
licensing, titling, or registration of a vehicle by a wholesale
dealer under the instant facts and circumstances, the act of
licensing, titling, or registration of a vehicle by a wholesale
dealer under the instant facts and circumstances will, thus,
give rise to the application of use tax under Chapter 212, F.S.

This response constitutes a Technical Assistance Advisement
under s. 213.22, F.S., which is binding on the Department only
under the facts and circumstances described in the request for
this advice as specified in s. 213.22, F.S. Our response is
predicated on those facts and the specific situation summarized
above. You are advised that subsequent statutory or
administrative rule changes or judicial interpretations of the
statutes or rules upon which this advice is based may subject
similar future transactions to a different treatment than
expressed in this response.

You are further advised that this response and your request are
public records under Chapter 119, F.S., which are subject to
disclosure to the public under the conditions of s. 213.22, F.S.
Your name, address, and any other details which might lead to
identification of the taxpayer must be deleted by the Department

before disclosure. In an effort to protect confidential
information, we request you notify the undersigned in writing
within 15 days of any deletions you wish made to the request or
this response.

Sincerely,

Daniel M. Wagner, Jr.
Tax Law Specialist
Tax Policy and Dispute Resolution

DW/

Control No. 24691