FAQ
This page contains frequently asked dealer questions along with answers provided by WSADA staff, with input from state agencies and outside experts.
Comprehensive information about dealer compliance can be found in WSADA’s Legal Manual.
NOTE: the information contained on this page does not constitute legal or financial advice. Please consult your attorney or accountant to confirm the accuracy of this information and obtain individualized guidance. For questions, please contact info@wsada.org.
Q: How do we know if our website advertisements are compliant?
A: There are a variety of requirements and standards that apply to dealership advertising. The most important of all is that all offers and disclaimers must be presented in a “clear and conspicuous” manner without the potential to mislead or confuse the consumer. Please refer to the Advertising section of WSADA’s legal manual for more detailed information.
Q: We sometimes have used vehicles we purchased at auction or elsewhere we know are coming to the dealership or which are on the lot but not reconditioned. Can we temporarily use a stock photo while we get the unit ready?
A: No. Under WAC 308-66-152(4) a dealership is prohibited from advertising a used vehicle using a picture that is not of the actual used vehicle being offered. New vehicles can be advertised with stock images if they “substantially show the same vehicle offered for sale.”
Q: Does WSADA license its forms to digital/eForms providers?
A: Yes. WSAD Services (a for-profit affiliate of WSADA) licenses forms to several DMS providers with eForms capability. Dealerships that wish to access those forms should contact their provider. Please click here if you wish to order generic or custom paper forms.
Q: Can a dealership use a customer-provided Power of Attorney (POA) on an Odometer disclosure?
A: According to Department of Licensing training professionals, no. Dealers are required to obtain an odometer disclosure statement from the selling owner (transferor), and acknowledge the disclosure as the transferee, when taking a vehicle in on trade, purchase, or otherwise acquiring a vehicle. Dealers must complete an odometer disclosure statement as transferor when selling a vehicle either wholesale or retail.
Q: What do I do if I have questions about my business license or dealer license?
A: DOL provides a comprehensive FAQ on business licensing as well as information on vehicle and vessel dealer licenses. You may also contact WSADA for assistance and/or attorney referrals: info@wsada.org.
Q: Does the luxury tax apply to out-of-state residents who qualify for sales tax exemption?
A: No, the luxury tax is part of RCW 82.08 so the same provisions and requirements apply as for sales tax exemptions.
Q: Please confirm warranty/service contract products are excluded from the luxury tax calculation.
A: If charges for the service contract/warranty are separately stated, the luxury tax does not apply to those items.
Q: If a lessee exercises an option to purchase, is the residual payment exempt from luxury tax?
A: That is correct. The residual amount is not subject to the luxury tax because the tax was paid at the time of the lease’s inception. However, the customer is subject to sales tax on the residual.
Q: Are lease acquisition fees exempt from the luxury tax?
A: No. Lease acquisition fees are part of the selling price and are not exempt from the luxury tax. See RCW 82.08.010.
Q: Are vehicles purchased out of state and brought into Washington subject to luxury tax?
A: Yes, the tax applies to non-exempt vehicles brought into Washington and subject to use tax. If the tax is not paid at the time of purchase, it will be due at the time the vehicle is registered with the Washington Department of Licensing (DOL). This means a vehicle purchased in Oregon and later registered in Washington will be subject to the tax. If the tax is paid at registration, it will be collected by DOL and remitted to DOR.
Q: Should the luxury tax be separately stated on the purchase contract?
A: The bill and statute do not specifically state that the additional tax must be separately stated. However, since RCW 82.08.050(9) requires sales tax to be separately stated, it’s probably a good idea to state the luxury tax separately.
Q: How long must a dealership maintain records of customer transactions?
A: A minimum of five years. However, WSADA, as well as legal and financial experts, recommend maintaining forms for at least seven years to account for the statute of limitations on contract claims (typically 2 years). RCW 46.70.120 governs dealership document retention, click here for additional information.
Q: If we sell a service contract with a vehicle, can we sell the vehicle “AS IS”?
A: No. The sale of a service contract automatically revives the implied warranty and prevents the vehicle from being sold “AS IS.” The “AS IS” version of the used car Buyer’s Guide should never be used in cases where a service contract is sold with the vehicle. Click here to view additional guidance from the FTC, and to access current versions of the Buyer’s Guide form.
Q: We offer a limited dealer warranty on some of our used cars. Can we still check the “Implied Warranties Only” box on the Buyer’s Guide?
A: No. If you offer a written warranty, check the “Dealer Warranty” box and describe the warranty in the space provided on the Buyers Guide. Also note the Buyers Guide can’t serve as your warranty. The warranty and related disclosures must be a separate document from the Buyers Guide. Consult the FTC’s Warranty Disclosure Rule for more information.