This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0973b.TMS
DATE: 3/30/2023
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 973 Rescission or Cancellation of a Motor Vehicle Sale
SPONSOR(S): Transportation & Modals Subcommittee, Civil Justice Subcommittee, Botana
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1636
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Civil Justice Subcommittee 16 Y, 0 N, As CS Mawn Jones
2) Transportation & Modals Subcommittee 15 Y, 1 N, As CS Johnson Hinshelwood
3) Judiciary Committee
SUMMARY ANALYSIS
A “motor vehicle” includes an automobile, motorcycle, or truck used to transport persons or property, which is
propelled by power other than muscular power. A motor vehicle dealer may sell motor vehicles in the state if
the dealer first registers to collect and report specified taxes, including the state sales tax, with the Department
of Revenue (DOR) and obtains a dealer’s license from the Department of Highway Safety and Motor Vehicles
(DHSMV). Under the Florida Revenue Act of 1949, sales taxes, plus any applicable discretionary sales surtax,
are due on the sale of all new or used motor vehicles in Florida unless an exemption applies.
The bill:
Authorizes a motor vehicle dealer, a motor vehicle purchaser, and any person claiming a lien on a
motor vehicle, by written concurrence of all parties, to agree to rescind or cancel a motor vehicle sale
under specified circumstances.
Specifies that an agreement among the parties subject to the rescinded or canceled sale invalidates
any subsequent requirements imposed upon the motor vehicle dealer to submit an application for a
certificate of title or remit any fees or taxes if all fees, taxes, and other moneys associated with the
rescinded or canceled sale are returned to the rightful parties.
Species that a motor vehicle dealer may obtain a duplicate certificate of origin or title, or a new
certificate of title, as specified in the bill.
Requires the DHSMV to rescind, cancel, or revoke an application for a certificate of title or a title that
has been issued if, within 60 days after the motor vehicle’s sale, a notarized affidavit signed by the
motor vehicle dealer, motor vehicle purchaser, and any person claiming a lien on the motor vehicle, is
executed on a form prescribed by the DHSMV, which form states that the parties have rescinded or
canceled the motor vehicle’s sale and all moneys associated with the vehicle’s transfer have been or
will be returned to the relevant parties. Under such circumstances, the bill also:
o Requires the DHSMV to process the application within a specified time period.
o Prohibits a motor vehicle dealer from offering for retail sale a motor vehicle subject to the
rescission or cancellation.
o Provides for the return of fees and sales tax to the motor vehicle dealer in certain situations.
o Requires a dealer to obtain and surrender any certificate of title issued or certify that such
certificate has been lost or destroyed or will be obtained and destroyed upon receipt.
o Specifies that a rescission, cancellation, or revocation does not negate the fact that the motor
vehicle has been the subject of a previous retail sale.
Provides that if a motor vehicle sale is rescinded or canceled and the application for a certificate of title
is rescinded, canceled, or revoked, the motor vehicle dealer must be reimbursed the amount of sales
tax collected, so long as the motor vehicle dealer has returned the sales tax to the purchaser.
The bill appears to have a negative fiscal impact on the state and local governments but has not been
evaluated by the Revenue Estimating Conference. The bill has an effective date of July 1, 2023. STORAGE NAME: h0973b.TMS PAGE: 2
DATE: 3/30/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Motor Vehicle Sales
A “motor vehicle” includes an automobile, motorcycle, or truck used to transport persons or property
and which is propelled by power other than muscular power.
1
Under Florida law, a motor vehicle
dealer
2
may sell motor vehicles in the state if the dealer first registers to collect and report specified
taxes with the Florida Department of Revenue (DOR) and obtains a dealer’s license from the Florida
Department of Highway Safety and Motor Vehicles (DHSMV).
3
Although Florida law provides rescission rights for many contracts for the sale of goods or services, no
such rescission rights exists for the sale of a motor vehicle by a licensed dealer.
4
Thus, a motor vehicle
purchaser has little recourse to cancel a motor vehicle sales contract and return the vehicle for a refund
unless such right is specified in the contract itself or the dealer otherwise agrees to void the contract
and accept the return.
Taxes Due on Motor Vehicle Sales
The Florida Revenue Act of 1949 (FRA), codified in ch. 212, F.S., establishes and regulates taxes on
sales, use, and other transactions in Florida, including motor vehicle sales. Under the FRA, sales
taxes,
5
plus any applicable discretionary sales surtax,
6
are due on the sale of all new or used motor
vehicles in Florida unless an exemption applies.
7
Such sales taxes are due on the motor vehicle’s sales
price, including any separately itemized charge or fee for items such as:
Accessories sold with the vehicle;
Preparation, settlement, or closing fees;
Freight, handling, or delivery of the motor vehicle to the dealer;
Commission; and
Any other expense or costs of the dealer that the dealer requires the purchaser to pay.
8
Further, any applicable discretionary sales surtax is due when the purchaser’s address on the motor
vehicle registration or title is in a location within a county imposing such a surtax and applies to the first
$5,000 of the purchase price.
9
The dealer must remit such taxes along with a tax return to DOR by the
first day of the month following each reporting period, and such taxes are late after the 20th day.
10
Tax Credits or Refunds
1
S. 320.01(1), F.S.
2
“Motor vehicle dealer” means any person engaged in the business of buying, selling, or dealing in motor vehicles; offering or
displaying motor vehicles for sale at wholesale or retail; or who may service and repair motor vehicles pursuant to an agreement as
defined in s. 320.60(1), F.S. Any person who buys, sells, or deals in three or more motor vehicles in any 12-month period is presumed
to be engaged in such business. S. 320.27(1)(c), F.S.
3
Id.; Florida Department of Revenue, Sales and Use Tax on Motor Vehicles,
https://floridarevenue.com/Forms_library/current/gt800030.pdf (last visited Mar. 20, 2023).
4
Florida Department of Highway Safety and Motor Vehicles, Buying From a Licensed Dealer, https://www.flhsmv.gov/safety-
center/consumer-education/buying-vehicle-florida/buying-licensed-dealer/ (last visited Mar. 20, 2023).
5
The general state sales tax under the FRA is currently set at 6% of the sales price.
6
Florida law authorizes counties to levy a discretionary sales surtax under specified situations to be used for specified purposes. Such
surcharge can be between 0.5 percent and 2 percent. S. 212.055, F.S.; Florida Department of Revenue, Discretionary Sales Surtax
Information for Calendar Year 2023, https://floridarevenue.com/Forms_library/current/dr15dss.pdf (last visited Mar. 20, 2023).
7
Id.; DOR, supra note 3.
8
DOR, supra note 3.
9
Id.
10
Id. STORAGE NAME: h0973b.TMS PAGE: 3
DATE: 3/30/2023
Under the FRA, if purchases are returned to a motor vehicle dealer by the purchaser or consumer after
the sales tax has been collected from or charged to the consumer, the dealer is entitled to
reimbursement of the amount of tax collected or charged by the dealer, in the manner prescribed by
DOR.
11
However, if the dealer has not remitted the tax to DOR, the dealer may deduct the same in
submitting his or her return upon receipt of a signed statement by the dealer as to the gross amount of
such refunds during the period covered by the signed statement, which may not be longer than 90
days.
12
DOR must then issue to the dealer an official credit memorandum equal to the net amount
remitted by the dealer for such tax collected or paid.
13
Such memorandum must be accepted by DOR at
full face value from the dealer to whom it is issued upon the remittance of subsequent taxes accrued
under this chapter, and if a dealer has retired from business and filed a final return, a tax refund may be
made if it can be established to the satisfaction of the DOR that the tax was not due.
14
Statements of Origin and Certificates of Title
Statements of Origin
A “manufacturer’s statements of origin,” sometimes referred to as a “certificate of origin,” is a vehicle’s
original ownership document, which document is necessary for the original purchaser to obtain a
certificate of title. No motor vehicle manufacturer, distributor, or dealer may sell or otherwise dispose of
a new motor vehicle without delivering to the purchaser a manufacturer’s statements of origin duly
executed and with such assignments that may be necessary to show title in the purchaser thereof, on
forms approved by the DHSMV.
15
Such statements must contain a certification of the identification and
description of the motor vehicle delivered and the name of the purchaser to whom it was originally sold,
over the signature of the authorized manufacturer who made the original delivery.
16
Certificates of Title
A “certificate of title” is the record evidencing vehicle ownership, which record is transferred from seller
to buyer upon completion of the vehicle’s sale.
17
Such a record may be a paper certificate authorized
by the DHSMV or a certificate consisting of information that is stored in an electronic form in the
DHSMV’s database.
18
Application for a certificate of title must be made upon a form prescribed by and filed with the
DHSMV.
19
However, if a certificate of title was previously issued for a motor vehicle in Florida, the
application generally must also be accompanied by the certificate of title duly assigned.
20
Further, if the
motor vehicle for which application for a certificate of title is made is a new motor vehicle for which a
manufacturer’s statements of origin are required, the application must be accompanied by the
statements of origin.
21
Under s. 319.32, F.S., the DHSMV must charge specified fees in connection with issuing, duplicating,
or otherwise handling certificates of title, including:
$70 for each original certificate of title, except for a certificate of title for a motor vehicle for hire
registered under s. 320.08(6), F.S.,
22
for which the title fee is $49;
$70 for a duplicate copy of a certificate of title, except for a certificate of title for a motor vehicle
for hire registered under s. 320.08(6), F.S., for which the tile fee is $49;
11
S. 212.17(1)(a), F.S.
12
Id.
13
Id.
14
Id.
15
S. 319.21, F.S.
16
Id.
17
S. 319.001(1), F.S.
18
Id.
19
S. 319.23, F.S.
20
Id.
21
Id.
22
Under this section, motor vehicles for hire are levied specified license taxes for their operation, which taxes must be paid to and
collected by the DHSMV. STORAGE NAME: h0973b.TMS PAGE: 4
DATE: 3/30/2023
$3 for each assignment by a lienholder;
$2 for noting a lien
23
on a title certificate;
$1 for the issuance of an original or duplicate certificate of title to cover the cost of materials
used for security purposes;
$2.50 for shipping and handling each paper title mailed by the DHSMV, which fee must be
deposited in the Highway Safety Operating Trust Fund; and
$4.25 for each application that is handled in connection with the issuance, duplication, or
transfer of any certificate of title.
Effect of Proposed Changes
The bill authorizes a motor vehicle purchaser to return his or her vehicle under specified conditions for
a refund, including a refund for the sales price and any sales taxes paid. This gives motor vehicle
purchasers similar flexibility and financial safety to that of purchasers of other products under Florida
law.
Specifically, the bill creates s. 319.255, F.S., to provide that a motor vehicle dealer, a motor vehicle
purchaser, and any person claiming a lien on a motor vehicle, by written concurrence of all parties
signed by each person or an authorized representative thereof, may rescind or cancel a motor vehicle
sale before an application for a certificate of title is submitted. Under the bill:
The written concurrence among the parties to the rescind or cancel the sale invalidates any
subsequent requirements imposed upon the motor vehicle dealer to submit an application for a
certificate of title or remit any fees or taxes if all fees, taxes, and other moneys associated with
the rescinded or canceled sale are returned to the rightful parties.
A motor vehicle dealer may obtain a duplicate certificate of origin or of title, or obtain a new
certificate of title, as specified in the bill.
The bill also requires the DHSMV to rescind, cancel, or revoke an application for a certificate of title or a
title that has been issued if, within 60 days after the sale of a motor vehicle, a notarized affidavit signed
by the motor vehicle dealer, the motor vehicle purchaser, and any person claiming a lien on the motor
vehicle, or an authorized representative of each such person, is executed on a form prescribed by the
DHSMV stating that such persons have rescinded or canceled the motor vehicle’s sale and that all
moneys associated with the motor vehicle’s transfer have been or will be returned to the relevant
parties. If a certificate of title has been issued, the motor vehicle dealer must obtain and surrender the
certificate of title to the DHSMV or certify that the certificate of title has been lost or destroyed or will be
obtained and destroyed upon receipt. Under this section:
The affidavit must be filed no later than 30 days after the date of execution of the affidavit by the
motor vehicle dealer, the motor vehicle purchaser, or any person claiming a lien on the motor
vehicle, whichever date is latest.
The DHSMV must process the affidavit within seven days after receipt and issue a certificate of
title to the motor vehicle dealer reflecting the dealer’s name and the odometer reading reflected
on the most recent assignment before the rescinded, canceled, or revoked sale.
A motor vehicle dealer may not offer a motor vehicle subject to this subsection for retail sale
until the motor vehicle dealer has received a certificate of title from the DHSMV.
A rescission, cancellation, or revocation of sale under this section does not negate the fact that
the motor vehicle has been the subject of a previous retail sale.
Fees paid to the DHSMV, less fees paid in accordance with s. 319.32, F.S., must be returned to
the motor vehicle dealer, and if no fees have been paid to the DHSMV, the motor vehicle dealer
must pay the fee required by s. 319.32, F.S.
Sales taxes refunded or credited to the motor vehicle purchaser must be refunded or credited to
the motor vehicle dealer in the manner prescribed by DOR.
23
A lien is a claim against property that evidences a debt, obligation, or duty. When someone has a lien secured by another person’s
motor vehicle, the lien is generally noted on the title certificate until the lien is satisfied and the lienholder files a satisfaction of lien with
the DHSMV. Fla. Jur. 2d Liens s. 37:1.; Florida Department of Highway Safety and Motor Vehicles, Liens and Titles,
https://www.flhsmv.gov/motor-vehicles-tags-titles/liens-and-titles/ (last visited Mar. 20, 2023). STORAGE NAME: h0973b.TMS PAGE: 5
DATE: 3/30/2023
Further, the bill amends s. 212.17, F.S., to provide that if, pursuant to s. 319.255, F.S., a motor vehicle
sale is rescinded or canceled and the application for a certificate of title is rescinded, canceled, or
revoked, the motor vehicle dealer must be reimbursed, in a manner prescribed by DOR, the amount of
tax collected or charged by the motor vehicle dealer for the sale or application, so long as the motor
vehicle dealer has returned to the motor vehicle purchaser the amount of such tax collected or charged.
The bill provides an effective date of July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Amends s. 212.17, F.S., relating to tax credits or refunds.
Section 2: Creates s. 319.255, F.S., relating to rescission or cancellation of motor vehicle sale.
Section 3: Provides an effective date of July 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The bill appears to have a negative fiscal impact on the state. The Revenue Estimating Conference
has not evaluated the fiscal impact of the bill.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The bill appears to have a negative fiscal impact to local governments. The Revenue Estimating
Conference has not evaluated the fiscal impact of the bill.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have a positive economic impact on the private sector by authorizing a motor vehicle
purchaser to return his or her vehicle under specified conditions for a refund, including a refund for the
sales price and any sales tax paid.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditure of funds; reduce the authority that counties or municipalities have to
raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other: STORAGE NAME: h0973b.TMS PAGE: 6
DATE: 3/30/2023
None.
B. RULE-MAKING AUTHORITY:
Chapter 319, F.S., vests the DHSMV with the authority to adopt rules to implement that chapter.
Similarly, chapter 213, F.S., vests DOR with the authority to adopt rules to implement provisions of the
revenue laws, including chapter 212, F.S.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 20, 2023, the Civil Justice Subcommittee adopted a proposed committee substitute (PCS) and
reported the bill favorably as a committee substitute. The PCS differs from the original bill in that it:
Eliminates provisions relating to the discharge of liens on motor vehicles.
Authorizes the return of sales taxes and specified fees paid for a motor vehicle’s sale when the sale
is canceled or rescinded within a specified timeframe and specified other conditions are met.
On March 29, 2023, the Transportation & Modals Subcommittee adopted one amendment and reported the
bill favorably as a committee substitute. The amendment:
Clarifies that a motor vehicle dealer will only get reimbursed for the amount of tax collected or
charged by the motor vehicle dealer if the motor vehicle dealer has returned to the motor vehicle
purchaser the amount of such tax collected or charged.
Specifies that the agreement to rescind or cancel the motor vehicle sale must be in writing.
Clarifies that the motor vehicle sale may be rescinded or canceled only by concurrence of all
specified parties.
Provides that an authorized representative may sign on behalf of specified persons.
Removes a provision providing that the parties are not required to report rescinded or canceled
motor vehicle sales to DHSMV.
This analysis is drafted to the committee substitute as passed by the Transportation & Modals
Subcommittee.