Act 1348 of 1997 provides a sales tax credit on a motor vehicle destroyed by a catastrophic event occurring on or after August 1, 1997. To qualify, a consumer must have paid sales tax on a motor vehicle (trailers are not eligible) within the last one hundred and eighty (180) days and the motor vehicle is destroyed or damaged by some catastrophic event resulting from a natural cause to the extent that the value is less than thirty percent (30%) of its retail value, as found in the N.A.D.A. Official Price Guide. This sales tax credit shall be used only to reduce any sales and use taxes. due upon registration of a subsequent replacement vehicle.
The consumer must apply to the Revenue Division's Tax Credits/Special Refunds Section in writing with information supporting the claim for credit. This information must include:
- Evidence that the sales tax was paid when the motor vehicle was registered (copy of tax receipt from the Revenue Office).
- Evidence as to the extent of the destruction or damage the value of the motor vehicle which is satisfactory to the Department to prove the value of the motor vehicle prior to the event and the value after the destruction or damage occurred.
- Evidence that the catastrophic even occurred within one hundred eighty (180) days of the motor vehicle being first registered.
Any other information as shall be required by the Director of the Department of Finance and Administration as necessary to issue the credit voucher.
All claims must be made in writing and filed within one (1) year from the date the vehicle was first registered. The credit voucher shall be valid for six (6) months from the date of issuance and may only be used by the consumer to whom it was issued. In no event shall a cash refund be given for the sales tax credit voucher.
When a consumer has tendered a trade-in motor vehicle toward the purchase of the destroyed vehicle which is credited, the consumer may apply for a credit voucher in the amount of the trade-in vehicle's consideration.
In addition to the documents provided for the sales tax credit, the consumer must also provide a copy of the bill of sale for the vehicle destroyed which shows information regarding the trade-in vehicle.
For those consumers who sell a vehicle after registering and paying tax on another vehicle, then a refund will be given.
If a vehicle is sold after registering the other vehicle, the sale must take place within 45 days of the date the other vehicle was purchased.