The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Commerce and Tourism
BILL: CS/SB 1636
INTRODUCER: Transportation Committee and Senator Wright
SUBJECT: Rescission or Cancellation of a Motor Vehicle Sale
DATE: April 3, 2023 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Price Vickers TR Fav/CS
2. Baird McKay CM Favorable
3. FP
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 1636 establishes a process, within specified timeframes and using certain documentation,
which authorizes a motor vehicle dealer, a motor vehicle purchaser, and any lienholder to agree
to rescind or cancel the sale of a vehicle, if all fees, taxes, and other moneys associated with the
rescinded or canceled sale, less specified titling fees, are returned to the relevant parties. In such
event, the bill requires the Department of Highway Safety and Motor Vehicles (DHSMV) to
rescind, cancel, or revoke an application for a certificate of title or a title that has already been
issued.
An agreement among the parties subject to the rescinded or canceled sale invalidates any
subsequent requirements imposed on the dealer to submit an application for a certificate of title
or to remit any fees or taxes if all fees, taxes, and other moneys associated with the rescinded or
canceled sale are returned. A dealer is authorized to obtain a duplicate certificate of origin or a
duplicate certificate of title or obtain a new certificate of title, documents that would be required
for a re-sale. A dealer is prohibited from offering a vehicle subject to the authorized rescission or
cancelation until the dealer has received a certificate of title from the DHSMV. A rescission,
cancellation, or revocation does not negate the fact that the vehicle has been the subject of a
previous retail sale.
The fiscal impact is indeterminate. See the “Fiscal Impact Statement” heading below.
The bill takes effect July 1, 2023.
BILL: CS/SB 1636 Page 2
II. Present Situation:
Rescission or cancellation of a motor vehicle sale currently occurs when the contract for sale
authorizes such or when the motor vehicle dealer otherwise agrees to cancel the contract and
accept return of the vehicle. Current law makes no provision for refund of titling and registration
fees in the event of a rescission or cancellation agreement voluntarily entered into by the dealer,
the purchaser, and any lienholders.
Motor Vehicle Dealers and Motor Vehicle Sales and Use Taxes
Currently, a motor vehicle dealer1 may sell motor vehicles2 in this state if the dealer first
registers with the Florida Department of Revenue (FDOR) to collect and report specified taxes
and obtains a dealer’s license from the DHSMV.3 Florida sales and use tax,4 plus any applicable
discretionary sales surtax,5 is due on all new or used motor vehicles sold, leased, delivered into,
imported into, or used in Florida, unless a specific exemption applies.6
The sales and use tax is due on the sale price of the motor vehicle,7 including any separately
itemized charge or fee for items such as any accessory sold with the vehicle; preparation,
1
Defined in s. 320.27(1)(c), F.S., to mean any person engaged in the business of buying, selling, or dealing in motor vehicles
or 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). Any person who buys, sells, or deals in three or more motor vehicles in any 12-
month period or who offers or displays for sale three or more motor vehicles in any 12-month period shall be prima facie
presumed to be engaged in such business. The terms “selling” and “sale” include lease-purchase transactions. According to
the FDOR, a motor vehicle dealer is any dealer registered with the FDOT to sell motor vehicles. See floridarevenue.com,
Sales and Use Tax on Motor Vehicles, available at gt800030.pdf (floridarevenue.com) (last visited April 3, 2023).
2
Defined in s. 320.27(1)(b), F.S., to mean any motor vehicle of the type and kind required to be registered and titled under
chapter 319 and this chapter, except a recreational vehicle, moped, motorcycle powered by a motor with a displacement of 50
cubic centimeters or less, or mobile home. According to the FDOR, a motor vehicle is an automobile, motorcycle, truck,
trailer, semi-trailer, truck tractor and semi-trailer combination, or any other vehicle operated on the roads of Florida used to
transport persons or property, and propelled by power other than muscle power. This includes recreational vehicles, such as a
travel trailer, camping trailer, truck camper, motor home, private motor coach, van conversion, park trailer, and fifth-wheel
trailer; and any other vehicle that is of a class or type that is required to be titled, licensed, or registered in Florida.
3
See generally s. 320.27, F.S., and floridarevenue.com, Sales and Use Tax on Motor Vehicles, available at gt800030.pdf
(floridarevenue.com) (last visited April 3, 2023).
4
The Florida Revenue Act of 1949, codified in Chapter 212, F.S., establishes and regulates taxes on sales, use, and other
transactions in Florida, including motor vehicle sales. The general state sales tax under the Act is currently set at 6 percent of
the sales price. Section 212.05(1)(a)1.a., F.S.
5
According to the FDOR, most counties impose a local option discretionary sales surtax, which is due when the purchaser’s
residing address on the registration or title to the motor vehicle is a location within a county imposing a surtax, applicable to
the first $5,000 of the purchase price. Id., floridarevenue.com.
6
Id. The FDOR document provides examples of motor vehicle sales that are exempt, or partially exempt, from the sales and
use tax. Section 212.08, F.S., sets out various exemptions for general groceries; medical products and supplies or medicine;
certain farm equipment; items bearing other excise taxes; items exempt on account of use; sales made to the United States
government, a state, or any county, municipality, or political subdivision of a state; and other miscellaneous exemptions. That
section also sets out a number of partial exemptions from the sales and use tax.
7
No title certificate may be issued on any motor vehicle, or, if no title is required by law, no license or registration may be
issued for any vehicle, unless there is filed with such application for title certificate or license or registration certificate a
receipt, issued by an authorized dealer or a designated agent of the FDOR, evidencing the payment of the tax imposed by
Chapter 212, F.S., where the same is payable. A presumption of sales and use tax applicability is created if the motor vehicle
is registered in this state. For the purpose of enforcing this provision, all county tax collectors and all persons or firms
authorized to sell or issue boat, mobile home, and motor vehicle licenses are hereby designated agents of the department and
BILL: CS/SB 1636 Page 3
settlement, or closing fees, and any other expense or cost of the dealer that the dealer required
the purchaser to pay.8 The taxes are generally due, along with a tax return,9 on the first day of the
month following each reporting period (whether monthly, quarterly, twice a year, or yearly), and
are late after the 20th day of the month following each reporting period.10 Any separately
itemized fee or charge required by a state law for titling, licensing, or registering the motor
vehicle, or for recording a lien on the motor vehicle, is not subject to the sales and use tax.11
Currently, under Chapter 212, F.S., if a motor vehicle purchase is returned to a dealer by the
purchaser after the sales tax has been collected from or charged to the account of the purchaser,
the dealer is entitled to reimbursement of the amount of tax collected or charged by the dealer, in
the manner prescribed by the FDOR.12
If the dealer has not remitted the sales tax to the FDOR, 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
exceed 90 days.13 The FDOR 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. If a dealer has retired
from business and filed a final return, a refund of the tax may be made if it can be established to
the FDOR’ satisfaction that the tax was not due.14
Statements of Origin and Certificates of Title
A manufacturer’s statement of origin (MSO), also referred to as a manufacturer’s certificate of
origin (MCO), is the original ownership document for a vehicle. The document, provided by the
new vehicle dealer, provides specific vehicle information, such as the year, make, and vehicle
identification number. When the vehicle is sold at retail, the document is surrendered to the
appropriate jurisdiction, and a title is issued.15
Florida law currently prohibits a manufacturer, distributor, licensed dealer, or other person from
selling or otherwise disposing of a new motor vehicle to a distributor, licensed dealer, or other
person without delivering to such distributor, licensed dealer, or other person an MSO duly
executed and with such assignments thereon as may be necessary to show title in the purchaser
thereof, on forms approved by the DHSMV. An MSO must also contain a certification of the
identification and description of the motor vehicle delivered and the name and address of the
are required to perform such duty in the same manner and under the same conditions prescribed for their other duties by the
constitution or any statute of this state. Section 212.06(10), F.S.
8
Id.
9
See s. 212.11, F.S.
10
Id.
11
Id.
12
Section 212.17(1)(a), F.S. The suggestion is made, however, that a refund of the sales tax paid by the dealer on the sale of a
motor vehicle cannot occur after a dealer re-purchases a vehicle from a customer who wishes to return that vehicle, as
opposed to a rescission or cancellation of the sale.
13
Section 212.17(1)(b), F.S.
14
Section 212.17(1)(c), F.S.
15
See aamva.org, Manufacturer’s Certification of Origin - American Association of Motor Vehicle Administrators -
AAMVA (last visited April 3, 2023).
BILL: CS/SB 1636 Page 4
distributor, licensed dealer, or other person to whom the motor vehicle was originally sold, over
the signature of an authorized official of the manufacturer who made the original delivery.16
A certificate of title (COT) is the record that is evidence of ownership of a vehicle, whether in
paper or electronic form.17 Generally, application for a COT must be made upon a form
prescribed by the DHSMV, must be filed with that agency, and be accompanied by the
statutorily prescribed fee. If a COT has previously been issued for a motor vehicle in this state,
the application must be accompanied by the COT duly assigned. If the motor vehicle for which
COT application is made is a new vehicle for which an MSO is required, the application must be
accompanied by such MSO.18
In the case of the sale of a motor vehicle by a licensed dealer to a general purchaser, the COT
must be obtained in the name of the purchaser by the dealer upon application signed by the
purchaser. If such sale is to a general purchaser who resides in another state or country, the
dealer is not required to apply for a certificate of title for the motor vehicle; however, the dealer
must transfer ownership and reassign the COT or MSO to the purchaser, and the purchaser must
sign an affidavit, as approved by the DHSMV, that the purchaser will title and register the motor
vehicle in another state or country.19
Certificate of Title Fees and Service Charges
Section 319.32, F.S., requires the DHSMV to charge specified fees and service charges relating
to issuing, duplicating, or otherwise processing COTs, including, but not limited to:
 For each original COT, $70;20
 For each duplicate copy of a COT, $70;21
 For each assignment by a lienholder, $3;
 For noting a lien on a COT, $2.
 For issuance of an original or duplicate COT to cover the cost of materials used for security
purposes;
 For shipping and handling for each paper title mailed by the DHSMV, a service fee of $2.50;
and
 For each application handled in connection with the issuance, duplication, or transfer of any
COT, a service charge of $4.25.22
16
Section 319.21(1), F.S.
17
Section 319.001(1), F.S.
18
Section 319.23(1), F.S.
19
Section 319.23(6)(a), F.S. A licensed dealer is required to apply for a registration and title within 30 days of delivery of the
vehicle. See flhsmv.gov, Buying from a Licensed Dealer - Florida Department of Highway Safety and Motor Vehicles
(flhsmv.gov) for additional tax, tag, and title information (last visited April 3, 2023).
20
Except for a COT for a motor vehicle for hire for which the title fee is $49.
21
Id.
22
This service charge must be collected by the DHSMV on any application handled directly from its office. Otherwise, these
service charges must be collected and retained by the tax collector who handles the application. Section 319.32(b), F.S. If the
tax collector contracts with a license plate agent, the tax collector is authorized to determine additional service charges to be
collected by the privately owned license plate agents approved by the tax collector. Section 319.32(c), F.S. The DHSMV
must also charge an additional fee of $10 for each original COT issued for a vehicle previously registered outside this state.
Section 319.32(3), F.S.
BILL: CS/SB 1636 Page 5
Motor Vehicle Registration and Related Fees
Florida’s definition of the term “motor vehicle” for registration purposes is quite broad,23 and all
vehicles meeting the definition, with some exceptions, are required to be registered in this state.24
Current law imposes an initial registration fee (a license tax) of $225 on automobiles and tri-
vehicles for private use, certain trucks, and motor homes and truck campers.25 Thereafter,
registration is generally based on the class and weight of the vehicle.26
Additional fees and service charges also apply.27 For example:
 License plates are issued for a ten-year period and must be replaced upon registration
renewal. The license plate fee is $28, which is paid at the rate of $2.80 per each year before
the plate is replaced and credited toward the next $28 replacement fee.28
 A service charge of $2.50 is imposed on each application handled in connection with original
issuance, duplicate issuance, or transfer of a license plate, or with transfer or issuance of a
registration certificate.29
Current DHSMV Refund Practices
The DHSMV advises:
If a dealer is requesting that a Florida Certificate of Title be cancelled for a
new vehicle/vessel because the customer (that the motor vehicle/vessel
was titled to) did not take delivery or possession of the motor
vehicle/vessel, the dealer and the customer must fill out and submit a
“Dealer Non-Delivery” affidavit to cancel the title. After canceling the
title for a new car, the dealer must contact the manufacturer and request a
duplicate MCO to re-title the vehicle. The dealer must also contact the
owner/lienholder to whom the incorrect MCO was assigned to request the
title be submitted to them. However, if the title is electronic, the dealership
should advise the lienholder to systematically satisfy its lien.
Currently, if the customer wants to cancel the sale or return a new
vehicle/vessel for any reason other than non-delivery, the return is handled
as a civil matter and the fees paid to the dealer are not refunded, including
title and registration fees. The only exception is the initial registration fee
for the license plate.30
23
Section 320.01(1), F.S.
24
Section 320.02, F.S.
25
Section 320.072, F.S.
26
Section 320.08, F.S.
27
See the DHSMV document provided to committee staff March 22, 2023, for a list of fees and service charges imposed on
all license plates, including additional fees imposed for specialty or personalized plates (on file in the Senate Transportation
Committee).
28
Section 320.06(1)(b)1., F.