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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 13974
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I am trying to figure out California Sales Tax. We run a car

Resolved Question:

I am trying to figure out California Sales Tax. We run a car dealership and we sell the cars on a credit sale. We are paying the tax on the full amount of the car in the quarter the car was sold. However when we repossess a car, how do we go back and get those credits? Do we go back and adjust the sale down to the collected amount? That way we are taxed on the actually amount paid by the customer?
Submitted: 10 months ago.
Category: Finance
Expert:  Megan C replied 10 months ago.

Megan C :

Hello and how are you today?

Megan C :

I hope you are doing well.

Megan C :

I found the answer to your question in publication 34, which is the sales tax and use guide for car dealerships

Megan C :

It is accessible, HERE

Megan C :

It states:

Megan C :

if you repossess a vehicle, a deduction can be claimed on your sales and use tax return for the net


taxable loss, provided the amount has been charged off for income tax purposes. The net taxable loss is the loss

after adjustments have been made for the wholesale value of the repossessed vehicle and for other credits, such

as refunded insurance payments and unearned finance charges, and for charges included in the sale that were not

subject to tax

Megan C :

So, yes - you do receive a credit equal to your tax loss on repossessions

Megan C :

Do you have any further questions about this?

Megan C :

This is covered on page 30 of the publication that I linked to.

Megan C :

IF you do not have any further questions, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 13974
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and other Finance Specialists are ready to help you
Expert:  Megan C replied 10 months ago.
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Expert:  Megan C replied 10 months ago.
Josh,

I see you never joined our chat. I have switched to this format so that you may see my response. If you have any questions, please reply below. Otherwise, please rate as "excellent" so that I may receive credit for assisting you today. Thanks again!

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