Accommodation sales

From the 2024 DOR Tax Exemption Study

Home Education Industry Guides Auto Dealers Accommodation Sales Print Accommodation sales What are accommodation sales? Automobile dealers often sell vehicles at cost to other dealers so that the "receiving" dealer can fill an existing order. These sales are generally referred to as "accommodation sales." Taxability of accommodation sales Sales of vehicles between dealers are generally taxable as wholesale sales. However, accommodation sales made by one dealer to another are not taxable to the "selling" dealer if the amount charged does not exceed the cost of the vehicle and the receiving dealer has an existing order from a customer for the vehicle. Reimburse previous accommodation sale When an accommodation sale occurs, the receiving dealer may reimburse the selling dealer in kind within fourteen days of the original accommodation sale. This reimbursement is also considered an accommodation sale when the vehicle or other item is sold at or below cost. How is cost determined? The cost of a vehicle includes the amount paid by the selling dealer, as well as any reasonable expenses for preparing the vehicle for sale. Actual delivery costs incurred by the selling dealer and billed to t