Why must vehicle dealers keep track of use tax records?

Vehicle dealers are required to maintain accurate use tax records primarily to comply with state regulations. Use tax is a type of tax imposed on the use of goods or services that have been purchased without paying sales tax, and it is crucial for dealers to document these transactions properly. This compliance ensures that the dealership remains in good standing with state tax authorities and minimizes the risk of penalties or audits.

Maintaining these records allows dealers to demonstrate their adherence to tax laws and facilitates the timely reporting and payment of any taxes owed. Failure to keep proper records can result in financial liabilities and legal repercussions for the dealership.