Title and Registration Fees: Who Collects Them?

Government fees are not dealer fees

Title fees, registration fees, plate or tag fees, and lien recording fees are charged by the state or county, not by you. They are different from your doc fee, which is your charge for the paperwork work. On the Buyer's Order they should be shown as their own lines so a customer can tell which money goes to the government and which stays with the dealership.

Mixing them together is a common mistake, and in some states it is more than a mistake. Several states require the government fees to be listed separately and passed through at their actual amount.

Who actually collects them

There are three common patterns, and your state may use one or a combination.

• The dealer collects at the sale and sends the fees to the state with the title work. This is common where dealers process titles on behalf of customers.
• The customer pays directly at the motor vehicle office or county tag office, and the dealer only hands over the paperwork.
• A split. The dealer collects some items, such as the title fee, and the customer pays others, such as the registration, on their own.

Why the amounts vary

Registration fees can depend on the vehicle weight, age, value, fuel type, or county. Title fees may differ if there is a lien, if the title is a duplicate, or if the car is coming from another state. Some places charge a title tax in place of sales tax, which is its own topic. Because so many factors apply, do not copy a flat fee from another deal. Use the actual current schedule from your state or county.

A hypothetical deal

Here is a made-up example to show how the lines should look. The amounts are placeholders, not any state's real fees.

Protect yourself on pass-through fees

• Charge the actual amount. If you collect more than the real fee and keep the difference, your state may treat it as an undisclosed fee.
• Send the money on time. Late title applications can cost the customer a penalty, and you may end up paying it.
• Keep a receipt for each filing so you can match what you collected with what you paid out.
• Refund the customer when a fee collected turns out to be too high or the deal unwinds.
• Use your state's wording on the contract. Some states want a specific statement about how the fees are handled.

How a dealer management system helps

DMS Apex works out tax for all 50 states and DC from each state's own published rules, with local tax entered or picked from the county, and the Buyer's Order prints each state's required fee wording so government fees and dealer fees sit on separate lines. The tax and fees reports let you match what you collected against what you paid out. It is $28 a month flat, with a 15-day free trial.

Tax rules change, and this is general information, not legal or tax advice. Confirm current title and registration fees and who collects them with your state's motor vehicle agency or an accountant.