California AB 85:
Dealertrack Helps You Prepare

What does this Bill state? Assembly Bill (AB) 85 requires used vehicle dealers to pay applicable sales tax to the Department of Motor Vehicles (DMV) on a per transaction basis within 30 days of the date of sale of the vehicle, instead of quarterly to the California Department of Tax and Fee Administration (CDTFA).

When will this begin? Starting January 1, 2021, specified used vehicle dealers must pay the applicable vehicle sales tax when they submit the registration application to the DMV. The dealer must pay the sales tax to the DMV within 30 days of the date of the vehicle sale. If the dealer fails to pay the sales tax, then penalties and interest will be applied.

Does this apply to me?: The categories of used dealers that need to submit sales tax per transaction starting January 1, 2021 include:

Used vehicle dealers licensed by the DMV for less than 2 years.

Used vehicle dealers who have reinstated their Seller’s Permit after having it cancelled, suspended, revoked or voluntarily surrendered within the last 2 years.

Used vehicle dealers who have been discovered by the CDTFA to have understated their tax within the last 2 years.

Used vehicle dealers who do not participate in the BPA program.

Dealers who meet the listed criteria will need to comply as of 1/1/2021 and it will roll out to additional dealers through 1/1/2023. If the DMV makes any changes to this phased approach we will update you as soon as possible.

How to Prepare:  Visit our on-demand webinar California AB 85 - What You Need to Know to understand the changes you can expect with AB 85 in effect.