In a vehicle sale, which items are taxable?

Study for the Wisconsin Car Sales Test. Prepare with flashcards and multiple choice questions, each question with hints and explanations. Ace your exam!

Multiple Choice

In a vehicle sale, which items are taxable?

In Wisconsin, sales tax on a vehicle applies to the price you pay for the car plus certain charges added by the seller that are part of the sale. A document preparation fee is a dealer charge tied to completing the sale, so it becomes part of what’s taxed. A SMOG fee charged by the dealer is also considered part of the transaction with the seller and is taxed. Charges that aren’t taxed include finance charges (interest) and insurance (paid to an insurer, not the seller as part of the sale). The smog certificate fee paid directly to the state is a government-imposed fee, not a charge the seller passes through as part of the sale, so it isn’t taxed. So the items that are taxable are the document preparation fee and the SMOG fee paid to the seller/dealer.

In Wisconsin, sales tax on a vehicle applies to the price you pay for the car plus certain charges added by the seller that are part of the sale. A document preparation fee is a dealer charge tied to completing the sale, so it becomes part of what’s taxed. A SMOG fee charged by the dealer is also considered part of the transaction with the seller and is taxed.

Charges that aren’t taxed include finance charges (interest) and insurance (paid to an insurer, not the seller as part of the sale). The smog certificate fee paid directly to the state is a government-imposed fee, not a charge the seller passes through as part of the sale, so it isn’t taxed.

So the items that are taxable are the document preparation fee and the SMOG fee paid to the seller/dealer.

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