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do you have to pay sales tax on documentation fees and inspection

Customer Question
fees when you purchase a...
do you have to pay sales tax on documentation fees and inspection fees when you purchase a car or truck , in califonia ?
Submitted: 7 years ago.Category: Tax
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Answered in 9 minutes by:
1/29/2010
Tax Professional: Mark D, Enrolled Agent replied 7 years ago
Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 1,316
Experience: MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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Joe,

Documentation fees are subject to sales tax per the California State Board of Equalization:

"A dealer may charge a document preparation service fee (doc fee) for the preparation of documents in connection with the sale of a vehicle, such as transfer papers required by the DMV. This fee is charged at the dealer’s discretion and is neither required nor collected by DMV. The fee may be preprinted on the car purchase order, vehicle contract, or added by the automobile dealer. These charges are taxable as part of the selling price of the vehicle on which tax is computed and it is unlawful to represent this charge as a governmental fee."

Inspection fees would also be subject:

"Other charges for smog check (such as inspection charges) in excess of the certificate fee are taxable if the smog check is done for a vehicle that the dealer plans to sell. Smog fees in excess of the certification charge that are not related to a retail sale are not subject to tax."

Regards,

Mark D
Mark D
Mark D, Enrolled Agent
Category: Tax
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