19.0763.01000
Sixty-sixth
Legislative Assembly HOUSE BILL NO. 1196
of North Dakota
Introduced by
Representatives Keiser, D. Ruby
1 A BILL for an Act to create and enact section 57-40.3-01.1 of the North Dakota Century Code,
2 relating to motor vehicle purchase price adjustments; to amend and reenact subsection 5 of
3 section 57-40.3-01 of the North Dakota Century Code, relating to the purchase price of a motor
4 vehicle; and to provide an effective date.
5 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
6 SECTION 1. AMENDMENT. Subsection 5 of section 57-40.3-01 of the North Dakota
7 Century Code is amended and reenacted as follows:
8 5. "Purchase price" means the total amount paid for the motor vehicle whether received
9 in money or otherwise, adjusted as provided in section 57-40.3-01.1. The purchase
10 price excludes the amount of a manufacturer's incentive or discount that reduces the
11 amount paid by the purchaser to the seller at the time of purchase. If a motor vehicle
12 or other tangible personal property that will be subject to a sales or use tax imposed
13 by chapter 57-39.2 or 57-40.2 when sold or used is taken in trade as a credit or as part
14 payment on a motor vehicle taxable under this chapter, the credit or trade-in value
15 allowed by the person selling the motor vehicle shall be deducted from the total selling
16 price to establish the purchase price of the vehicle being sold and the trade-in
17 allowance allowed by the seller on a motor vehicle accepted as a trade-in shall
18 constitute the purchase price of a motor vehicle accepted as a trade-in. If a motor
19 vehicle is purchased by an owner who has had a motor vehicle stolen or totally
20 destroyed, a credit or trade-in credit shall be allowed against one or more replacement
21 motor vehicle purchases in a cumulative amount not to exceed the total amount the
22 purchaser has been compensated by an insurance company for the loss. For a leased
23 vehicle that is stolen or totally destroyed, the credit may not exceed the total amount of
24 motor vehicle excise tax paid. The purchaser must provide the director of the
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1 department of transportation with a notarized statement from the insurance company
2 within three years from the date of issuance verifying the fact that the original vehicle
3 was a total loss and stating the amount compensated by the insurance company for
4 the loss. The statement from the insurance company must accompany the purchaser's
5 application for a certificate of title for the replacement vehicle. If the full amount of the
6 credit under this subsection has not been used, the director of the department of
7 transportation shall record on the face of the notarized statement the necessary
8 information to identify the partial use of the credit and shall retain a copy and return
9 the original to the purchaser. In instances in which a licensed motor vehicle dealer
10 places into the dealer's service a new vehicle for the purpose of renting, leasing, or
11 dealership utility service, the reasonable value of the vehicle replaced shall be
12 included as trade-in value provided the vehicle replaced has been subject to motor
13 vehicle excise tax under section 57-40.3-02 and if the new vehicle is properly
14 registered and licensed. "Purchase price" when the motor vehicle is acquired by gift or
15 by any other transfer for a nominal or no monetary consideration also includes the
16 average value of similar motor vehicles, established by standards and guides as
17 determined by the director of the department of transportation. "Purchase price" when
18 a motor vehicle is manufactured by a person who registers it under the laws of this
19 state means the manufactured cost of suchthe motor vehicle and manufactured cost
20 means the amount expended for materials, labor, and other properly allocable costs of
21 manufacture except that, in the absence of actual expenditures for the manufacture of
22 a part or all of the motor vehicle, manufactured cost means the reasonable value of
23 the completed motor vehicle.
24 SECTION 2. Section 57-40.3-01.1 of the North Dakota Century Code is created and
25 enacted as follows:
26 57-40.3-01.1. Purchase price adjustments.
27 1. The purchase price of a motor vehicle excludes the amount of a manufacturer's
28 incentive or discount that reduces the amount paid by the purchaser to the seller at the
29 time of purchase.
30 2. If a motor vehicle or other tangible personal property that will be subject to a sales or
31 use tax imposed by chapter 57-39.2 or 57-40.2 when sold or used is taken in trade as
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1 a credit or as part payment on a motor vehicle taxable under this chapter, the credit or
2 trade-in value allowed by the person selling the motor vehicle must be deducted from
3 the total selling price to establish the purchase price of the vehicle being sold and the
4 trade-in allowance allowed by the seller on a motor vehicle accepted as a trade-in
5 constitutes the purchase price of a motor vehicle accepted as a trade-in.
6 3. If a motor vehicle is purchased by an owner who has had a motor vehicle stolen or
7 totally destroyed, a credit or trade-in credit must be allowed against one or more
8 replacement motor vehicle purchases in a cumulative amount not to exceed the total
9 amount the purchaser has been compensated by an insurance company for the loss.
10 For a leased vehicle that is stolen or totally destroyed, the credit may not exceed the
11 total amount of motor vehicle excise tax paid.
12 a. The purchaser shall provide the director of the department of transportation with
13 a notarized statement from the insurance company within three years from the
14 date of issuance verifying the original vehicle was a total loss and stating the
15 amount compensated by the insurance company for the loss.
16 b. The statement from the insurance company must accompany the purchaser's
17 application for a certificate of title for the replacement vehicle. If the full amount of
18 the credit under this subsection has not been used, the director of the department
19 of transportation shall record on the face of the notarized statement the
20 necessary information to identify the partial use of the credit and shall retain a
21 copy and return the original to the purchaser.
22 4. When a licensed motor vehicle dealer places into the dealer's service a new vehicle
23 for the purpose of renting, leasing, or dealership utility service, the reasonable value of
24 the vehicle replaced must be included as trade-in value provided the vehicle replaced
25 has been subject to motor vehicle excise tax under section 57-40.3-02 and if the new
26 vehicle is properly registered and licensed.
27 5. If a motor vehicle is purchased by a person as a replacement vehicle, a credit must be
28 allowed against the purchase of the motor vehicle in an amount not to exceed the total
29 amount the person received for the sale of the vehicle being replaced.
30 a. The purchaser of the vehicle being replaced shall provide the seller a copy of the
31 motor vehicle purchaser's certificate required under section 57-40.3-05.
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1 b. The seller shall attach the copy of the motor vehicle purchaser's certificate to the
2 seller's application for a certificate of title for the replacement vehicle.
3 c. The credit under this subsection must be claimed within three years from the date
4 of sale listed on the certificate in subdivision a.
5 SECTION 3. EFFECTIVE DATE. This Act is effective for purchases occurring after June 30,
6 2019.
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Statutes affected:
INTRODUCED: 57-40.3-01