What form is used to document the collection of use tax by dealers?

The correct form used to document the collection of use tax by dealers is the Report of Sale, also known as REG 51. This document serves a specific purpose in the transaction process of selling used vehicles. It allows dealers to report the sale of a vehicle, ensuring that the appropriate use tax is collected and reported to the state.

When a dealership sells a vehicle, it may have to collect use tax from the buyer if the vehicle was previously registered in a different state or if it has not been subject to sales tax in the current state. The Report of Sale captures vital information about the sale, including vehicle details, buyer and seller information, and the amount of use tax collected. This ensures compliance with state tax regulations and maintains proper records for both the dealer and the buyer.

Other forms listed serve different purposes: Form 1099 relates to income reporting, the Sales Tax Report is typically used for broader tax reporting rather than specifically for vehicle sales, and the Vehicle Transfer Form is used for the transfer of ownership but does not address tax collection explicitly. Therefore, the Report of Sale accurately reflects the requirements for documenting the collection of use tax by dealers.