In response to my request regarding internet taxation of auto sales, I received three responses. Brice Russell of the HdL Companies summarized the issue best. He wrote; Where an in-State auto buyer buys an automobile from a dealer in California, whether that sale is "on line" or at the site of a dealership, the sales tax is collected on a point of sale basis. Cities and unincorporated counties that host auto dealers therfore receive this tax in their regular allocations from the Board of Equalization. It is important to note that to sell new cars in this State, dealers must be both licensed and registered with the Board of Equalization. This requirement reinforces the point of sale method for tax allocation. When a buyer in California purchases a car from Autobytel.com or a similar company operating on the internet, the internet company is functioning strictly as a matchmaker - connecting a buyer with a participating dealer. When the buyer makes his/her purchase, it is from a licensed and registered dealer and point of sale is maintained. If a car is purchased through ebay or some other web-related site and is delivered from out-of-state, no sales tax is collected. Instead, a use tax is paid into the county pool of the county where the vehicle is registered. Except for the involvement of the DMV, this allocation method is similar to that used for the out-of-state purchase of other goods. Again, thank you to all those that responded. It is sincerely appreciated. Marc Puckett Director of Finance City of Costa Mesa
