DMV Car Salesman Certification Practice Test 2025 - Free Car Salesman Exam Questions and Study Guide

Question: 1 / 400

What is true regarding the sales and use tax refund process when a dealer makes a goodwill substitution?

The tax is refundable

The tax can be credited towards future purchases

The tax may be partially refunded

The tax is not refundable

In the context of a goodwill substitution, the sales and use tax is generally considered non-refundable. When a dealer replaces a vehicle or product as a gesture of goodwill, it does not create a scenario in which the dealer can reclaim the sales tax previously paid. This is because the tax is applied at the point of sale and is generally considered a final amount owed for the transaction, regardless of any subsequent exchanges or substitutions.

Other options imply a possibility of refund, credit, or partial refund, which does not align with the established tax rules regarding goodwill substitutions. In these cases, dealers do not have the opportunity to adjust or retrieve tax amounts once the original sale is completed and tax has been collected. Therefore, the stances on refunds, credits, or partial refunds do not apply in scenarios involving goodwill substitutions.

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