A vehicle title is in one name, but the loan for the vehicle was signed by another person. If the owner defaults on the loan and the title is transferred to the person holding the loan, is sales tax due on the transfer?

Yes. All transfers of title to motor vehicles are subject to sales tax. Since the vehicle was never titled in the name of the person holding the loan, he or she never held ownership of the vehicle. Sales tax, plus any applicable discretionary sales surtax, is due when the title is transferred to the person holding the loan.

To learn more about Florida sales and use tax, visit the Department’s Florida Sales and Use Tax webpage.

Reference: Section 212.06(10), Florida Statutes