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Committee hears bill to clarify sales-tax treatment of abandoned-vehicle auction proceeds
Summary
Senate Bill 5072 would change how proceeds from auctioned abandoned vehicles are taxed, shifting the tax treatment so tow operators are not left with unintended sales tax liabilities; witnesses described a fiscal note estimating a revenue decrease over the four-year outlook.
A bill to clarify how sales and B&O taxes apply when tow operators sell abandoned vehicles at auction drew industry support and a neutral Department of Revenue response at a committee hearing.
Jeff Mitchell, committee staff, explained that current law treats towing and storage services as retail sales subject to retailing B&O and sales tax; when an abandoned vehicle sells at auction for less than towing and storage charges, the towing operator currently retains proceeds net of sales tax remitted to the state. SB 5072 would instead treat gross proceeds from sale of an abandoned vehicle as a sale of a…
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