#DEALER CONVEYANCE FEE REGISTRATION#

The general rules for calculation of tax on sales of motor vehicles are contained in the Department's sale tax regulation on Motor Vehicles, 830 CMR 64H.25.1. In a sale of tangible personal property, the taxable sales price includes any services that are a part of the sale. The taxable 'sales price' in a retail sale is generally the total amount paid by the purchaser to the vendor as consideration.

A complementary 6.25 percent use tax is imposed on tangible personal property and telecommunications services purchased from any vendor for storage, use or consumption in Massachusetts. Where applicable, the excise is imposed at the rate of 6.25 percent of the sales price of the property or services sold. The statutory definition of 'sale' includes any transfer of title or possession, or both, for a consideration including leases or rentals of tangible personal property. Issue: Are separately stated document preparation fees and title preparation fees charged by a motor vehicle dealer in connection with the sale of a motor vehicle subject to tax?ĭirective: Separately stated document preparation fees and title preparation fees charged by a motor vehicle dealer in connection with the sale of a motor vehicle are part of the sales price subject to sales tax, regardless of whether they are paid at the time of the sale or financed.ĭiscussion of Law: Massachusetts imposes an excise upon all retail sales of tangible personal property and telecommunications services in Massachusetts by a vendor unless otherwise exempt. Additionally, any consumer who has suffered a financial harm due to a violation will have the right to sue the dealership for unfair trade practices.Introduction: In many motor vehicle sales transactions, the motor vehicle dealer charges the retail customer a separately stated document preparation fee and title preparation fee relating to paperwork necessary to complete the sale including the title and registration. Perhaps the legislature will implement a cap on fees in a future session – one competing bill that did not become law would have limited the fee to $75.ĭealerships that violate the law by not including the fees in their advertisements or by failing to give consumers the required written statement will face a fine of $1,000. The apparent purpose of this provision is to enable the Legislature to determine whether the fees are fair compensation for conveyance services, as claimed by the car dealer’s lobby, or whether they are hidden profits, as claimed by consumer advocates. The new law will also require car dealers to submit a report to the Legislature advising the amounts charged for conveyance fees and explaining how those fees were determined.

#DEALER CONVEYANCE FEE REGISTRATION#

So, cash buyers can handle the registration themselves and save a significant portion of the fee. The form will also inform consumers of the services that are provided in return for the fee and give them the option to perform some of those services themselves. Dealerships are also now required to give consumers a written statement informing them of the fee and advising them that the fee is negotiable. Under the new law, car dealerships will be required to prominently disclose the conveyance fee in any advertisement that includes the price of a car. The average fee in Connecticut in 2011 was $357, and some dealerships charge as much as $799. Consumer advocates have complained that the fees are sources of hidden profit and that dealerships lure consumers with artificially low car prices only to add large conveyance fees. The new law includes provisions that will dramatically change the way that car dealers charge consumers for dealer conveyance fees.Ĭonveyance fees are supposed to compensate auto dealers for the cost of processing the paperwork, registering the vehicle, and closing the sale. The legislature approved, and Governor Malloy signed, a massive “Implementer Bill” on June 30, 2015. A special session was called to consider revising the state budget and to address other issues. When the clock ran out on the Connecticut General Assembly’s 2015 legislative session on June 3, many high-priority bills had not received final votes.

Dealer conveyance fee