A: Theresa from Marina and Kristina from Hollister asked us, "are the auction companies during car week on the Monterey Peninsula licensed auto dealers and do they collect sales taxes?"
Kristina said during last year's auto auction, sales totaled $170 million and also wanted to know, how much of that money benefited local communities?
Think of it like this: Gooding and Company and any other auctioneer you might see this weekend is basically a high-class used car salesman. Okay, while that's a bit of an understatement, it works the same way. They are all licensed by the California Department of Motor Vehicles.
"When we do auctions in Arizona we were licensed there and when we do them in Florida we were licensed there at each of the auction houses we have to be licensed in the state where they do their business," said Gooding and Company Chief Financial Officer Morgan Carter.
When the auction businesses sell one of these beauties, there is a sales tax just like anything else.
"It is just like buying groceries or clothing, we pass on that sales tax to the buyer," said Carter.
There is one caveat.
"In the case of someone taking the car out of the state or out of the country the vehicle is exempt from sales tax, but the buyer is still liable to pay a use tax when they go to register the vehicle in Nevada or Maine or France or England," said Carter.
In other words, Monterey County better be hoping that some of the Ferraris, like a 1957 Testa Rossa, stays local. The red sports car could be the most expensive car sale in the world at $14 million or more.
"A buyer of a car at any of these auctions will pay the local sales tax, so in this case they'll pay the Monterey County tax rate of 8.25 percent."
The county doesn't see that money right away. Those taxes go to the state Board of Equalization and then the money gets re-allocated to Monterey County depending on law.
