Source: http://comptroller.texas.gov/taxinfo/audit/mv/mv01.html
Timestamp: 2015-10-05 16:43:11
Document Index: 465879004

Matched Legal Cases: ['art. 6686', 'art. 6686', '§152', '§152', '§152', '§504']

Motor Vehicle Manual Texas Comptroller of Public Accounts Texas Comptroller of Public Accounts, Glenn Hegar
Maintained by the Audit Division (Revised 09/2011)
Audit Areas Application for Texas Certificate
of Title/Form 130U
130U Examples
Tax Assessor-Collector's Receipt -
Title Application Receipt Title
Application Receipt, Example
31- RTS - Example
Other Documents Definitions
Lien Assumptions
Recording and Releasing Liens Motor Vehicle - Definition
Taxability Example 1, Accessories Attached at
the Time of Sale Example 2, Separately-Purchased
Motor Vehicle and Accessories Example 3, Accessories Added to a
Completed Truck Example 4, Accessories Purchased
to Combine into a Motor Vehicle Mopeds and Motorcycles Off-Road Vehicle Moveable Specialized Equipment Modified Motor Vehicles Taxability (Modified Motor
Vehicles) Effect of Titling and Registration
Examples of Moveable Specialized
Equipment House Trailer - Definition Travel Trailer - Definition Mobile Office - Definition Bunkhouse - Definition Taxability (House/Travel Trailer, Mobile Office, Bunkhouse) Trailers and Semi-trailers Gift Tax New Resident Tax Credit Former Texas Resident Texas Resident
Temporarily Out-of-State When the New
Resident Tax Does Not Apply Dealer Plates Manufacturer Plates General
The motor vehicle sales and use tax is levied on: The retail sale of every motor vehicle sold in Texas The even exchange of vehicles Motor vehicles purchased at retail sale outside the state and
brought into the state and used on the public highways Vehicles brought into the state by new residents The gift of a motor vehicle Motor vehicle sales and use tax is collected by the tax assessor-collector
in each county at the time of registration of the vehicle. The registration and
payment of the tax is the obligation of the purchaser of a motor vehicle.
However, since January 1, 1996, a seller who is a licensed motor vehicle
dealer must collect the tax from the purchaser and remit it to the tax assessor-collector.
The Comptroller's Office: Has general supervision over the motor vehicle tax Is responsible for furnishing rules and regulations to the county
tax assessor-collectors to assure the tax can be consistently applied. The major difference between auditing for limited sales tax
and motor vehicle sales tax is that a return is not filed by either the seller
or the purchaser of a motor vehicle.
Instead, a joint affidavit, Texas Department of
Transportation Form 130U (Application for Texas Certificate of Title) is completed
and signed by both the buyer and seller for each retail sale.
A Texas licensed motor vehicle dealer may purchase vehicles
for resale without an Application for Texas Certificate of Title but must issue
a Texas Motor Vehicle Sales Tax Resale Certificate to the selling dealer.
The Application for Texas Certificate of Title (Form 130U)
shows the title application information, the amount of tax due, and is also
used to document tax-exempt transfers. Beginning in November 1994, the Texas Department of
Transportation began a phased-in on-line registration system. This on-line
registration system is explained further in the chapter dealing with tax
assessor-collectors.
The major categories of taxpayers of motor vehicle tax
audits are as follows:
Motor Vehicle Dealers and Purchasers
If the dealer understates the taxable value on the
affidavit, collects more tax than was due, collects more tax than was reported,
and/or fails to furnish proper documentation to the customer, the dealer will
be held liable for tax, penalty and interest.
If a purchaser fails to register a vehicle from a cash sale,
pays less tax than was due, or registers the vehicle in another state to reduce
the tax liability, the purchaser will be held liable for tax, penalty and
On or after January 1, 1996:
Since a licensed motor vehicle dealer must collect the tax
from the purchaser and remit it to the tax assessor-collector, a dealer will be
held liable for tax, penalty, and interest due to discrepancies on the
The Comptroller's office periodically reviews the tax
receipts of each county to determine that all tax collected is being paid. Tax assessor-collectors
will be held liable for unpaid tax, but penalty or interest will not be
Application for Texas Certificate of Title/Form 130U
This form is required by both the Motor Vehicle Division of
the Texas Department of Highways and Public Transportation and the
Comptroller's Office whenever a title application is requested for a motor
vehicle. This joint affidavit is executed by both the previous owner and the
new owner of a motor vehicle.
A Form 130U must be completed for all: Retail sales between a seller and a purchaser Even trades Gifts Motor vehicles purchased at retail sale outside Texas for use in Texas Motor vehicles brought into Texas by new Texas residents. Exempt Sales In the first three cases above, the previous owner and the
new owner must sign a statement that all facts on the affidavit are true. Only
the signature of the owner is necessary on the final three cases.
The Form 130U will provide the: Assessor-Collector's transaction ID# Texas dealer number of seller, if applicable Vehicle description License plate number Lienholder information, if applicable
Sales price Trade-in value and description, if applicable Amount of tax due If an exempt transaction, reason for exemption
Seller's address and signature Purchaser's address and signature The Form 130U is used by a county tax assessor-collector to
determine the tax due and is the source document used to complete the tax
receipt which is issued to the new owner. The title applications are forwarded
to the Motor Vehicle Division of the Texas Department of Transportation daily.
The Department of Transportation processes and issues the titles, and sends the
source documents to a contracted company to be microfilmed. The microfilm
record includes both the Form 130U and the tax receipt and is retained by the
Motor Vehicle Division of the Texas Department of Transportation.
What if the New Buyer of a Used Vehicle Will not Go to
the County Tax Office?
In many instances of sales of used motor vehicles between
individuals, the new buyer is unwilling to go to the county tax office to
register the vehicle in his/her name and to pay the applicable motor vehicle
taxes. The previous owner should submit a written vehicle transfer
notification to the Texas Department of Transportation (TxDot Form Number
VTR-345, Revised 7/2007). TxDot will update the vehicle record to show that
the vehicle was sold and the date that it was sold. Effective January 1, 2008,
TxDot will establish procedures that permit the previous owner to submit the
notice of transfer through TxDot’s Internet website. Also effective January 1,
2008, the previous owner must submit the notice of transfer before the 30th
day after the date the new buyer took possession of the vehicle.
TxDot recommends submitting this form even if the vehicle
was sold or traded in to a motor vehicle dealer.
Motor Vehicle Tax Manual - Application
for Texas Certificate of Title
Tax Assessor-Collector's
Receipt - Title Application Receipt
The Registration and Title System (RTS) of the Texas
Department of Transportation allows a motor vehicle title application to be
directly entered by county tax assessor-collector employees. The application
information is taken from the Form 130U. The vehicle information obtained from
the Form 130U is entered onto the RTS System, and the motor vehicle sales and
use taxes are collected by the employee. A multi-copy RTS receipt is printed
and given to the purchaser. On occasion, such as when the on-line system is
down, the tax assessor-collector will issue a handwritten receipt, Form 31-RTS.
However, once the system is back on-line, the information is entered onto the
system, and a computer-generated receipt is printed. This computer-generated
receipt is mailed to the purchaser.
The Title Application Receipt is a numbered receipt issued
by a county tax assessor-collector. The receipt serves as both a tax receipt
and as a receipt for title application. These RTS receipts are identified by
transaction ID numbers and are issued state-wide as needed. A central computer
in Austin generates the numbers as the various counties access them. The
transaction ID number contains seventeen digits.
101 361 35926 145032
3-digit workstation ID
Gregorian date (number of days since 01/01/1900)
Military time (hour, minute, and second)
Information contained on a Title Application Receipt
includes: Purchaser's name and address Description of the vehicle registered Lienholder's information, if applicable
Date the receipt is issued County in which the receipt is issued Name of the tax assessor-collector ID# of the deputy issuing the receipt Previous owner's name Sales price Trade-in allowance Amount of tax collected An example of a Title Application Receipt
COUNTY: TAC NAME:
STICKER NO: 6508953WX DATE: 08/21/2006 EFFECTIVE DATE: 08/21/2006
PLATE NO: TTL30P TIME: 9:29AM EXPIRATION DATE: 7/2007
DOCUMENT NO: 04630335296092448 EMPLOYEE ID: 0103940 TRANSACTION ID: 04630335296092448
REGISTRATION CLASS: PASSENGER-LESS/EQL. 6000
PLATE TYPE: PASSENGER PLT
STICKER TYPE: WS
VEHICLE IDENTIFICATION NO: 1FALP6539SK206008 VEHICLE CLASSIFICATION: PASS
YR/MAKE: 2005/FORD MODEL: CGL BODY STYLE: 4D UNIT NO:
EMPTY WT: 3400 CARRYING CAPACITY: 0 GROSS WT: 3400 TONNAGE: 0.00 TRAILER TYPE:
BODY VEHICLE IDENTIFICATION NO: TRAVEL TRLR LENGTH: 0
PREV OWNER NAME: BLUEBONNET MOTORS INC PREV CITY/STATE: NEW BRFLS, TX
INVENTORY ITEM(S) YR
UNIVERSAL WINDSHIELD STKR 2007
PASSENGER PLT FEES ASSESSED
TITLE APPLICATION FEE $ 13.00
VEHICLE RECORD NOTATIONS SALES TAX FEE $ 754.38
ACTUAL MILEAGE UNIVERSAL WINDSHIELD STICKER $ 58.80
SPECIAL EXAMINATION REQUIRED CNTY ROAD BRIDGE ADD-ON FEE $ 10.00
TOTAL $ 836.18
METHOD OF PAYMENT AND PAYMENT AMOUNT:
CHECK #6580 $ 836.18
AMOUNT PAID $ 836.18
CHANGE DUE $ 0.00
ODOMETER READING: 16056 BRAND: A SALES TAX CATEGORY: SALES/USE
OWNERSHIP EVIDENCE: OUT-OF-STATE TITLE
1ST LIEN DATE: 07/31/2006 SALES PRICE $ 12,070.00
SAN ANTONIO CREDIT UNION TRADE IN ALLOWANCE $ 0.00
P O BOX 1356 TAXABLE AMOUNT $ 12,070.00
SAN ANTONIO, TX 78295-1356 SALES TAX PAID $ 754.38
OTHER STATE TAX PAID - $ 0.00
TAX PENALTY $ 0.00
2ND LIEN TOTAL TAX PAID $ 754.38
BATCH NO: 3033529601 BATCH COUNT: 3
3RD LIEN
THIS RECEIPT TO BE CARRIED IN ALL COMMERCIAL VEHICLES.
VTR-500-RTS (DHT 144625)(REV. 3/96) Form 31-RTS,
This is an example of a tax receipt issued when the RTS
The following source document is also available, during a
motor vehicle tax audit, for the auditor to use:
The title history can be obtained from the Motor Vehicle
Division of the Texas Department of Transportation. It shows all the title
activity on a particular vehicle beginning with a manufacturer's statement of
origin (MSO), or the first titling of a vehicle brought into this state.
Included in a title history are copies of: Titles issued showing assignments from one owner to another. Application for Title (Form 130-U) Lienholder information.
Title Application Receipt To order title histories, complete a " Request for Texas
Motor Vehicle Information " (TxDot Form # VTR-275) and attach an Excel
spreadsheet with a list of vehicles. This list must include:
Fax the form and the Excel spreadsheet to:
Rachel Lindley, Supervisor
Fax: (512)465-3034
Phone: (512)465-7961 (Direct Line)
The TxDot Form VTR-275 can be downloaded from the Texas
Department of Transportation website: http://www.dot.state.tx.us/forms/vehicle_titles.htm
Assigned Title When the previous owner of a motor vehicle (or his power of
attorney) has signed the back of a title and indicates the name the
person to whom the vehicle is being transferred.
Certificate of Title The certificate of title is issued through the Motor Vehicle Division of the Texas Department of Transportation. A blue copy is the original and becomes the "owner's" copy when the vehicle is paid off.
Dealer The term dealer, as used in this tax guide, means a person,
firm, or corporation licensed under Tex. Rev. Civ. Stat. Ann. art. 6686 for the
purpose of regularly and actively engaging in the business of buying, selling,
or exchanging motor vehicles.
Draft A means of securing payment for the seller. The negotiable
title or the lienholder's copy of the Form 31 receipt showing the name
of the lienholder is enclosed in the draft envelope. Upon approval, the
lienholder directs a financial institution to pay the amount to the seller. The
draft is drawn up by the seller who takes it to his bank, who then directs the
draft to the lienholder's bank for payment. Drafts are handled similar to
checks except credit is not given until the draft is accepted by the payor.
Floor Plan A method by which a dealer finances his inventory of motor
vehicles. The dealer is required to pay only a percentage of the cost of a
vehicle with a financial institution providing the balance. The financial
institution is paid when a vehicle is sold.
Franchised Dealer A dealer who holds a franchise with a motor vehicle
manufacturer to sell a particular make of car, such as Buick, Chevrolet, or Toyota.
Holdback A reduction of a vehicle's cost to the dealer, which is held
by the original manufacturer until the end of the year. The invoice will show
the dealer cost plus the amount of holdback. The dealer must pay the dealer
cost when the invoice is due, but eventually will receive the amount of
Independent Dealer Usually a used car dealer.
Manufacturer The term manufacturer means a manufacturer of motor
Manufacturer's Statement of Origin (MSO) A document generated by the original manufacturer of a motor
vehicle showing the date manufactured, the serial number assigned to the
vehicle, and other pertinent information pertaining to the vehicle. Think of it
as a "birth certificate" for a motor vehicle. The MSO is surrendered
to the county tax assessor when application for title is made. This is also
referred to as a manufacturer's certificate of origin (MCO).
Negotiable Title A title that is free of liens or other encumbrances and can
be freely transferred.
Non-Negotiable Title A duplicate of a negotiable title with the words
"Non-Negotiable" printed on the face. If there is a lien on a
vehicle, the lienholder gets the negotiable title, and the owner gets the
non-negotiable title, which serves to show ownership, but which cannot be
Open Title When the previous owner of a motor vehicle (or his power of attorney)
has signed the back of a title but has not filled in the name of the
person to whom the vehicle is to be transferred.
Overallowance When stating a price to a customer, a dealer may inflate
both the sales price and the trade-in allowance by the same amount. The
transaction normally will be booked at the lower amounts. We are concerned only
with the taxable difference, which should be the same in both instances.
Payoff The net unpaid balance on a motor vehicle due to a
A related finance company is
a separate entity set up by a seller-finance dealer that will purchase the
accounts receivables (notes) from the dealer. In order for the sale of the
notes not to trigger acceleration of the unpaid taxes due, the ownership of the
qualifying related finance company must be at least 80 percent identical as the
ownership of the dealer who sells the notes.
Retail Sale A retail sale is the transfer of a
motor vehicle in return for consideration, including the assumption of a lien
on a vehicle, by a purchaser. However, a retail sale has NOT occurred when a
purchaser acquires a motor vehicle for the exclusive purpose of resale.
(Example: A motor vehicle purchased at an auction by a dealer who is holding
that vehicle exclusively for resale. This is not a retail sale.) A vehicle operated with a dealer
tag in accordance with Tex. Rev. Civ. Stat. Ann. art. 6686 is not considered a
Roll-Out (Turn-Key) The total amount paid by the customer, including tax, title,
license fee, and documentary fees.
Sale A sale is the transfer of a motor
vehicle in return for anything of value (consideration) including the
assumption of a lien on a vehicle by a purchaser. A sale includes installment and
credit sales, and exchanges for property and/or for money.
Seller-Finance (Tote the Note) Dealer
A dealer who finances the sales of motor vehicles from his
Stock Number The inventory control number assigned to new and used
vehicles by the dealer.
Third-Party Trade-In When a customer purchases a new vehicle and sells his used
vehicle directly to a third party rather than trading the vehicle to the
dealer. The affidavit lists the used vehicle as a trade-in towards the purchase
price of the new vehicle, thus reducing the customer's tax liability. This type
of trade-in is not allowed for tax purposes, and can not reduce the amount
Receipt issued by county tax
assessor-collectors which serves as both proof of title application and
registration and payment of the motor vehicle tax.
Trade-In Allowance If a motor vehicle is traded to the seller, the trade-in
allowance is the amount the seller allows as credit against the purchase price
of the new vehicle. Tax is computed on the trade difference without considering
any payoff.
T,T,L Tax, Title, and License
VIN Vehicle Identification Number, which is unique to every
Wash-Out This occurs when a trade-in on a new vehicle is assigned the
stock number of the new vehicle prefixed or suffixed by the letter
"A". If a vehicle is traded in when "A" is sold, that
trade-in will be assigned the same number plus "B" instead of
"A". This goes on until there is no trade-in. This system can aid in
determining if a trade-in existed and subsequent disposition of the trade-in.
Wholesale Sale Sale by a dealer to another dealer for resale.
Total consideration is the total amount paid or to be paid for a motor vehicle and all accessories that are attached to it at the time of the sale. The term "total consideration" includes anything
given as payment and could include a boat, airplane, land, livestock, labor, or
the assumption of a lien.
Motor vehicle tax is imposed on the total consideration paid
or to be paid for a motor vehicle. Total Consideration Includes...
The amount of the sales price of the motor vehicle without deducting for: the cost of the motor vehicle, the cost of materials, labor, service, interest, loss, or any
other expense ("Dealer Prep"), the cost of transportation of the motor vehicle prior to its sale
or purchase, and any manufacturer's or importer's excise tax imposed on the motor
vehicle by the United States. Total Consideration DOES NOT Include...
The following can be deducted from the selling price for purposes of computing motor vehicle tax:
cash discounts allowed on a sale (this does not include a cash down payment, a cash payment for the vehicle, or cash insurance proceeds toward the purchase of a vehicle)
sales price of a motor vehicle returned by a customer when the full sales price is refunded either in cash or credit
the amount charged for labor or services rendered in installing, remodeling, or repairing the motor vehicle sold
the amount charged for finance charges, carrying charges, service
charges, or interest from credit extended on sales of motor vehicles under
conditional sales contracts or other contracts providing for deferred payments
of the purchase price the value of a trade-in, as all or part of the consideration for
the other motor vehicle documentary fees charges for transportation of the motor vehicle after the sale Federal Retail Sales Excise Tax (imposed on heavy trucks)
Motor Vehicle inventory tax
grants issued by participating counties to qualifying low-income
people for the replacement purchase of a motor vehicle (see below)
fee charged by a seller of a motor vehicle for a debt cancellation agreement.
Grants for the Accelerated Retirement of Certain Vehicles
Effective June 8, 2007, participating counties may offer
qualifying low-income people a grant of up to $3500 for the replacement
purchase of a motor vehicle from a dealer participating in the grant program. The grants are to assist qualifying low-income people to replace a pre-1996
vehicle that would have failed the EPA Final Acceleration Simulation Mode
Standards emission test, or other criteria established by the Texas Commission
on Environmental Quality. The grants are not part of the total consideration
for the purchase of qualifying vehicles and are, thus, not subject to Texas motor vehicle sales tax. Participating dealers must document the amount of the grant
on the title application and in their accounting records.
The Finance Code was amended, effective September 1, 2009, to allow a seller of a motor vehicle to charge a purchaser a fee for a debt cancellation agreement. If the vehicle sold is later destroyed or stolen, the purchaser is no longer under any obligation to pay any outstanding balance due on the vehicle. This fee is not subject to motor vehicle sales and use tax.
§152.021 and §152.022
(b) The tax is 6 ¼ percent of the total consideration.
07-01-71 through 07-31-84 4.00%
08-01-84 through 08-31-87 5.00%
09-01-87 through 08-31-91 6.00%
09-01-91 through Present 6.25%
In addition, there is a surcharge on diesel-powered motor
vehicles with a gross vehicle registered weight exceeding 14,000 pounds
(§152.0215. Texas Emissions Reduction Plan Surcharge).
Effective January 3, 2002, a 2.5 percent surcharge is
assessed on model year vehicles 1996 and earlier on vehicles purchased in Texas only
Effective July 1, 2003, there is a two-tier surcharge on
2.5 percent surcharge on model year vehicles 1996 and earlier —
assessed on both vehicles purchased in Texas and purchased out-of-state
1 percent surcharge on model year vehicles 1997 and later —
The surcharge is effective until September 30, 2010, when it
is scheduled to expire. The surcharge may not be offset by sales or use tax
Effective June 17, 2011, a person who registers or renews the registration of a motor vehicle in Texas may contribute $5 or more to the Parks and Wildlife Department.
Standard presumptive value is the private-party transaction
value of a motor vehicle, as determined by the Texas Department of
Transportation based on an appropriate regional guidebook of a nationally
recognized motor vehicle value guide service. A private party transaction is a
retail sale of a motor vehicle in which neither the buyer nor the seller of the
motor vehicle is a motor vehicle dealer.
Effective October 1, 2006, the county tax assessor-collector
will determine the tax due of a used vehicle based on one of the following when
the transaction is between individuals:
The purchase price of the used vehicle, if the purchaser
paid is at least 80 percent or more of the standard presumptive value for
80 percent of the standard presumptive value for the used
vehicle, if the purchaser paid less than 80 percent of the standard
presumptive value for the vehicle; or
The appraised value of the used vehicle, if the purchaser
paid less than 80 percent of the standard presumptive value for the
vehicle and provides a certified appraisal of the vehicle.
A purchaser who decides to provide an appraised value for
the used vehicle must obtain the certified appraisal on a
Comptroller-prescribed form within 20 county working days after the date of the
purchase or after bringing the vehicle into Texas. A purchaser will be able to
get a certified appraisal in one of two ways:
From a licensed Texas motor vehicle dealer for a fee of no
less than $100 and no more than $300 for a certified appraisal for a motor
vehicle; no less than $100 and no more than $500 for a certified appraisal
of house trailer, travel trailer, or motor home,
From a licensed motorcycle dealer for a fee of no less
than $40 and no more than $300 for a certified appraisal of a motorcycle,
From a insurance adjuster for a fee determined by the
The standard presumptive value does not apply to:
Vehicles involved in an even exchange or trade
Vehicles acquired through a mechanic’s lien
Vehicles acquired through a storage lien
Abandoned or abandoned nuisance vehicles acquired under
Transportation Code, Chapter l83
Vehicles eligible for a specialty license plate as classic
motor vehicle, as provided in the Transportation Code, §504.501
Effective September 1, 2007, vehicles sold by a
governmental entity at public auction
(a) A tax is imposed on every retail
sale of every motor vehicle sold in this state. Except as provided by this
chapter, the tax is an obligation of and shall be paid by the purchaser of the
(a) A use tax is imposed on a motor vehicle purchased at
retail sale outside this state and used on the public highways of this state by
a Texas resident or other person who is domiciled or doing business in this
Before the motor vehicle use tax is assessed, credit is
allowed for any legally imposed sales or use taxes paid by the purchaser
The tax assessor-collector of the county in which an application for registration or for a Texas certificate of title is made shall collect the taxes from the purchaser of the vehicle. The motor vehicle sales tax is due by the 20th working day after the day that the motor vehicle is delivered to the purchaser. The motor vehicle use tax is due by the 20th working day after the day that the motor vehicle is brought
into Texas. The tax assessor-collector will issue a receipt to the purchaser
as proof that the taxes have been paid on the vehicle.
Effective January 1, 2012, the motor vehicle sales tax is due within 30 calendar days from the date that the motor vehicle is delivered to the purchaser. The motor vehicle use tax is due within 30 calendar days after the motor vehicle is brought into Texas. However, this does not apply to active military personnel (see below).
Effective January 1, 2008, if the purchaser of a used motor
vehicle is a member of the
A member of the Texas National Guard or of the National
Guard of another state serving on active duty under an order of the
President of the United Stated, or
A member of a reserve component of the armed forces of the
United States serving on active duty under an order of the President of
the United States The taxes on the vehicle are due not later than the 60th
working after the date of the receipt of the vehicle by the purchaser.
If the purchaser does not file the application for the
vehicle and pay the applicable taxes within the allowable period, the purchaser
is liable for $10 late fee to be paid to the county tax assessor-collector when
the application is filed. Effective January 1, 2008, the late fee is
$10 if the purchaser is a motor vehicle dealer and has a
general distinguishing number;
$25 if the purchaser is not a motor vehicle dealer. If
the application is filed after the 31st working date after the
purchaser took possession of the vehicle, there is an additional late fee
of $25. In addition, the purchaser accrues an additional penalty of $25
for each subsequent 30-day period or portion of a 30-day period in which
the application is not filed.
A county assessor-collector or the Texas Department of Motor Vehicles (DMV) may refuse to register a motor vehicle if the assessor-collector or the DMV receives information that the owner of the vehicle:
owes the county money for a fine, fee, or tax that is past due; or
failed to appear in connection with a complaint, citation, information, or indictment in a court in the county in which a criminal proceeding is pending against the owner.
The late transfer fee does not apply to motor vehicles
eligible to be issued
Classic vehicle license plates under Section 504.501 of the
Transportation Code, and
Antique vehicle license plates under Section 504.502 of the
A separately stated charge for the preparation and
processing of documents relating to the transfer of a motor vehicle (usually
called a "documentary fee") is not part of the total consideration
paid for the motor vehicle and is not subject to motor vehicle tax.
Both manufacturer's and dealer's rebates passed directly to
the customer should be deducted from the total sales price when computing the
taxable value of a vehicle. The rebates do not need to be in the form of cash, and
they may be assigned to the dealer.
When a manufacturer makes a rebate to a selling dealer and
the rebate, or any portion of it, is passed to the customer and can be
identified as a rebate, it should be considered a cash discount and deducted
from the sales price.
Factory and dealer rebates passed on to a customer should be
shown on the Application for Texas Certificate and on the Title Application Tax
Receipt. The amount of the rebate should be added in with any trade-in amounts and
shown on the trade-in line.
Motor vehicle tax is due from any person assuming an
existing lien on a motor vehicle. The taxable amount is the amount required to
release the lien (commonly called "net payoff").
However, if the person assuming the lien pays an amount in
addition to the amount of the lien, tax is due on the total amount. A lien
assumption between family members is subject to tax. Gift tax does not apply if
there is a lien assumption.
and Releasing Liens
A lien may be recorded or deleted by the title owner of the
vehicle without motor vehicle tax being due.
A motor vehicle is a self-propelled unit designed to
transport property separately from itself or persons other than the driver upon
In addition, trailers, semi-trailers, house trailers, and
motorcycles are specifically defined as motor vehicles. The definition also
includes jeeps, stingers, auxiliary axles, converter gears, and dollies.
A motor vehicle does not include:
A device moved only by human power
A device used exclusively on stationary rails or tracks
A vehicle in which the certificate of title has been
surrendered in exchange for:
A salvage vehicle title issued pursuant to Chapter 501 of the
A certificate of authority issued pursuant Chapter 683 of the
Transportation Code (abandoned vehicle)
A non-repairable vehicle title issued pursuant to Chapter 501 of
An ownership document issued by another state which is similar to
any of the three titles listed above
A vehicle that has been declared a total loss by an insurance
company pursuant to settlement or adjustment of a claim
Effective September 1, 2011, oilfield portable units are now excluded from being taxed as motor vehicles. An oilfield portable unit is a bunkhouse, manufactured home, trailer or semi-trailer designed to be used for temporary lodging or as temporary office space that is used exclusively at any oil, gas, water disposal or injection well site to provide to well site employees, contractors or other workers sleeping accommodations or temporary work space, including office space. The oilfield portable unit must not require attachment to a foundation or to real property to be functional. Qualifying oilfield portable units are subject to sales and use tax rather than motor vehicle or hotel occupancy taxes.
An oilfield portable unit would not include a travel trailer. In addition, bunkhouses, trailers, semi-trailers and manufactured houses used anywhere other than at a well site for sleeping accommodations or work space continue to be subject to motor vehicle, hotel occupancy, and/or sales tax as applicable.
Accessories Attached to a Motor Vehicle
Accessories include virtually any item that is not a motor vehicle and that can
either be attached to a motor vehicle or combined with other parts to make a
An accessory can be an item such as a side-view mirror, a CB
radio, or a major piece of equipment such as a cement mixer or an
oil-well-servicing unit.
Motor vehicle tax is due on the consideration paid or to be paid for a motor
vehicle, including all accessories attached at the time of sale.
A motor vehicle and accessories are sometimes purchased
separately, but are combined before the vehicle is actually registered and tax
is assessed. To determine the amount of tax due on a motor vehicle, it is
necessary to determine what accessories were attached to the motor vehicle at
Several combinations of circumstances can occur when a motor
vehicle or accessories are purchased. Each of these combinations and the
resulting tax consequences is discussed on the following pages.
ACCESSORIES ATTACHED AT THE TIME OF SALE
When a motor vehicle is purchased with accessories attached
to it, motor vehicle tax is due on the total selling price.
A purchaser orders a fully-assembled truck, with accessories
A purchaser pays motor vehicle tax on the fully-assembled
truck and all attached accessories.
SEPARATELY-PURCHASED MOTOR VEHICLE AND ACCESSORIES
When a buyer purchases a motor vehicle and makes a separate
purchase of accessories, motor vehicle tax is due on the selling price of the
motor vehicle. Limited sales and use tax is due on the selling price of the
accessories. It doesn't matter if the motor vehicle and the accessories are
purchased from different sellers or from the same seller at different times.
A taxpayer purchases a truck chassis and a truck body from
separate suppliers and assembles the truck or has it assembled.
A taxpayer pays motor vehicle tax on the truck chassis and
limited sales and use tax on the truck body.
ACCESSORIES ADDED TO A COMPLETED TRUCK
A taxpayer purchases accessories to add to a completed truck
on which motor vehicle tax has already been paid.
A taxpayer pays Limited sales and use tax on the purchase of
If the motor vehicle is sold after accessories have been
attached, motor vehicle tax is due on the total selling price (including the
ACCESSORIES PURCHASED TO COMBINE INTO A MOTOR VEHICLE
When parts and accessories are purchased to be combined into
a motor vehicle and no single part or accessory is a motor vehicle, motor vehicle
tax is not due when the builder initially titles the motor vehicle. A
motor vehicle built from parts is commonly called a "home-made" or
"shop-made" motor vehicle.
The taxpayer pays Limited sales and use tax on each part or
accessory ordered to build a motor vehicle. Motor vehicle tax is not due when
the taxpayer (builder) initially titles the truck.
The only time motor vehicle tax is not due on
a homemade motor vehicle is when the vehicle is initially titled by the person
who actually built it. Once a vehicle has been titled or registered by the
person who built it, motor vehicle tax is due on all subsequent sales.
Motor vehicle tax is due from the person who custom orders a
motor vehicle to be built because someone else is the actual builder. However,
no motor vehicle tax is due when an individual purchases component parts and
then hires another person to assemble them into a motor vehicle.
A moped is a motor-assisted bicycle which can be propelled
either by human power or by a motor with a capacity of less than 60 cubic
centimeters piston displacement, or by both. A moped has a maximum speed of 20
A motorcycle means every motor vehicle having a saddle for
the use of the rider and designed to propel itself with not more than three
wheels in contact with the ground, but excludes a tractor or any three-wheeled
vehicle equipped with a cab, seat and seat belt that is designed to contain the
operator of the vehicle inside the cab.
An off-road motorcycle is designed primarily for use off the
public streets and highways and does not meet registration and safety
inspection requirements for a motor vehicle. (A common example of an off-road
motorcycle is a dirt bike.)
Mopeds and motorcycles (excluding off-road motorcycles) are
motor vehicles and are subject to motor vehicle tax. A Texas Certificate of
Title must be issued on a moped or motorcycle even though that moped or
motorcycle is not required to be registered.
An off-road motorcycle is subject to Limited sales tax.
Effective September 1, 2009, a motorcycle includes an enclosed three-wheeled passenger vehicle that:
Is designed to operate with wheels in contact with the ground;
Has a minimum empty weight of 900 lbs.;
Its manufacturer produces at least 300 similar vehicles in any calendar year;
Seats that are certified by the vehicle manufacturer to meet the requirements of the Federal Motor Vehicle Safety Standards;
A steering wheel to maneuver the vehicle;
A propulsion unit located in front of or behind the enclosed occupant compartment;
A seat belt for each vehicle occupant certified by the manufacturer to meet the requirements of Federal Motor Vehicle Safety Standards;
A windshield and one or more windshield wipers certified by the manufacturer to meet the requirements of Federal Motor Vehicle Safety Standards;
A vehicle structure certified by the manufacturer to meet the requirements of Federal Motor Vehicle Safety Standards;
MotorcycleMoped
Dirt BikeThree-Wheeled Motorcycle
An off-road vehicle is a self-propelled vehicle designed
primarily for use off the public streets and highways. Examples of off-road
vehicles are: golf carts fork lifts go carts race cars three wheelers quad runners other types of vehicles which must be titled under the Texas Certificate of Title Act, but are not designed or intended by the manufacturer to meet registration and safety inspection requirements for motor vehicles
Off-road vehicles are subject to Limited sales tax.
Moveable Specialized Equipment
Moveable specialized equipment includes units designed and
built to perform a specific function but not to transport separate property or
persons other than the driver. For example, a motorized crane with a half-cab
for the driver/operator is a piece of moveable specialized equipment. It is
designed and built to perform a specific function and not to transport property
or persons other than the operator on a public highway.
Examples of Moveable Specialized Equipment
All moveable specialized equipment is subject to Limited
A motor vehicle will often have accessories or equipment
attached to it which significantly modify the motor vehicle, enabling it to
A motor vehicle does not lose its identify as a motor
vehicle because of accessories attached to it. For example, a flat-bed truck
with an oil-well-servicing unit attached remains a motor vehicle for tax
Examples of Modified Motor Vehicles
Flatbed Truck with Mounted Crane Wrecker
All motor vehicles, regardless of use or accessories
attached, are subject to motor vehicle tax unless specifically exempted. To
determine the taxable amount paid for a motor vehicle with accessories or equipment
attached, it is necessary to determine what accessories or equipment were
attached to the motor vehicle at the time of the sale.
Effect of Titling and Registration
Whether or not a particular piece of equipment is taxed as a
motor vehicle is determined by the criteria discussed in this section. Tax
liability is not determined by the type of registration and titling required by
the Texas Department of Highways and Public Transportation.
For tax purposes, it is often necessary to distinguish between
nearly identical pieces of equipment with the same use. For example, some
oil-well-servicing units are taxed as motor vehicles, while others are moveable
specialized equipment and are subject to Limited sales and use tax. It is a
unit's actual design and construction, rather than its use, which determines
the applicable tax.
Flat bed trucks used to transport cranes and are motor
If the vehicle has room to transport passengers as well as
the driver, it is a motor vehicle.
House Trailer/Travel
The term house trailer includes a travel trailer, park
model, and a bunkhouse.
The term house trailer does not include manufactured
A house trailer is a vehicle without automotive power that
is: built on a permanent chassis with wheels, axles, and a towing
designed so that it can be drawn on the highway by a motor
Designed so that it can serve as a temporary dwelling or for
eating, sleeping, place of business, or place for storage wherever parked, and
Not designed as a year-round single family residence requiring a
HUD label for manufactured housing, and
May consist of more than one unit which can be joined together or
assembled at the location where it is parked for use, and
May be self-contained and/or require connection to outside
Portable Buildings and Prefabricated Buildings
Manufactured at a location other than its intended use, and
Require a structure other than its own frame for support during transportation
(lowboy trailer, trailer, truck, dolly, etc.), and
Do not qualify for a HUD label or a decal issued by the Texas
Department of Labor and standards, and
Designed so that they can be carried from site to site and used
as a dwelling, for storage, or as a place of business when placed on or
attached to realty
An example would be a mobile office.
A bunkhouse is a house trailer designed to be used as a
sleeping place for a group or crew, but not as a single-family residence.
Constructed on or after June 15, 1976, according to the
rules of the United States Department and Urban Development
Designed to be used as a year-round single family
Set up with or without a permanent foundation system when
the structure is connected to the required utilities
Transportable in one or more sections
At least eight body feet in width
At least 40 feet long
At least 320 feet square feet when erected on site
Includes the plumbing, heating, air conditioning, and
electrical systems of the home
Requires a HUD label
Built at a location other than the home site
House trailers, travel trailers, and bunkhouses are subject
to motor vehicle tax.
Manufactured homes are taxed under the Texas Manufactured
Housing Sales and Use Tax Act and are not subject to motor vehicle tax. For
more information, refer to Chapter 14.
Trailers designed to be used as an office, sales outlet, or
other work place are not considered motor vehicles. Mobile offices are
taxed under Chapter 151, the Limited Sales, Excise, and Use Tax.
Motor vehicle tax is due on the total sales price of a house
trailer including all accessories attached at the time of sale.
Transportation charges prior to the sale are taxable.
Transportation charges after the sale (transportation from a
place of sale to a setup site) and installation or setup charges are not
subject to the motor vehicle tax.
Tax liability is not determined by the type of registration
and titling required by the Texas Department of Highways and Public
A trailer is a vehicle designed or used to carry its load
entirely on its own structure and is drawn by a motor vehicle.
A semi trailer is a vehicle designed or used in conjunction
with a motor vehicle so that some part of its own weight and its load rests
upon, or is carried by, another vehicle.
Semi-trailers include gooseneck trailers.
All trailers and semi-trailers, except farm trailers, are
subject to motor vehicle tax. For more information on farm trailers, refer to
Chapter 2, Exemptions.
A gift is any transfer of a motor vehicle in which a person
receiving a vehicle does not pay any consideration.
A $10 gift tax is imposed on any gift of a motor vehicle.
The tax is the obligation of the person receiving the vehicle, and is paid to
the county tax assessor-collector at the time the vehicle is titled and
Effective September 1, 2009, there are limits as to the transactions that qualify as gifts of motor vehicles. The vehicle must be given to or accepted from a:
Donated to or given by a 501(c)(3) nonprofit service organization.
All other transactions without consideration are sales of motor vehicles and are subject to the tax calculated on the vehicle�s standard presumptive value.
In order to document a qualifying gift of a motor vehicle, the donor and person receiving the vehicle must complete a joint notarized affidavit of fact (Form 14-317) describing the transaction and the relationship between donor/donee. Either the recipient or donor must file the affidavit in person. A donor includes a person authorized to act on behalf of an estate in the case of an inheritance. A title service required to be licensed under the Transportation Code may not file the affidavit.
The person filing the affidavit must present a current identification document containing the person�s photo. Acceptable ID is limited to one of the following:
A driver�s license or personal ID card from Texas or another U.S. state
An original U.S. or foreign country passport
An ID card or similar form of identification issued by the Texas Department of Criminal Justice
A U.S. Military ID card, or
An ID card or document issued by the Department of Homeland Security or U.S. Citizenship and Immigration Services
The required Comptroller affidavit is shown below.
Form 14-317 is available on the Comptroller's Web site.
An even trade is the exchange of motor vehicles in which no
consideration other than the exchange of the vehicles is involved. More than one vehicle can be exchanged for one or more
vehicles if the net value to both parties remains the same. EXAMPLES: Two vehicles traded in return for one One vehicle traded in return for two An exchange of a motor vehicle for a fishing boat would not
qualify as an even exchange. Motor vehicle tax would be due on the vehicle
based on the fair market value of the boat.
A $5 tax is imposed on each person receiving a motor vehicle
in an even trade.
A new resident tax is imposed: In the amount of $90 upon any motor vehicle which is brought into Texas by a new resident and has been previously registered in the new resident's name in another state or foreign country.
In the amount of $90 upon any motor vehicle which has been previously leased out-of-state and subsequently brought into Texas for use upon the public highways by the lessee/new resident.
Effective September 1, 2005, the tax is the lesser of $90 or 6¼% of the total consideration if the vehicle brought into Texas is eligible to be issued a specialty license plate (antique vehicle).
The new resident tax is in lieu of the 6 ¼% use tax. The tax is the new resident's obligation and is paid to the county tax assessor-collector when a vehicle is titled and registered.
If the motor vehicle has not been previously registered in
the new resident's name in another state or foreign country, the use tax
Credit is not allowed for motor vehicle tax paid to another
state or foreign country for new resident transfers.
Former Texas Resident:
A former resident of Texas who moves back to Texas owes the $90
new resident tax, regardless of where the vehicle was purchased. However, the former resident would not owe any tax if documentation is provided that the motor vehicle sales tax has been previously paid on the vehicle being returned to Texas.
A Texas resident who leaves Texas, forfeits Texas residency and then returns to Texas is a new resident and would owe the $90 new resident tax on a vehicle purchased outside of Texas and previously registered to the new resident elsewhere. If a Texas resident leaves the state without forfeiting Texas residency, the resident owes the state motor vehicle use tax on any vehicle purchased outside Texas with credit given for similar tax paid to another state. When a vehicle is purchased in Texas and removed from this state because the vehicle will be titled, registered, and operated exclusively elsewhere, then the purchaser owes tax on the purchase price when returning the vehicle to Texas. Credit is given for similar tax paid to another state. When a person purchases a vehicle in Texas and pays sales tax on the purchase in Texas, no additional tax is due if the person returns to Texas with that vehicle.
Texas Resident Temporarily Out of State:
A Texas resident living temporarily out of state may be
required to title a motor vehicle out of state on which the resident has
previously registered and paid tax on in Texas. There is no liability for
additional tax upon returning to Texas with the same motor vehicle. Examples are
military personnel who are Texas residents and who are temporarily stationed at
A taxpayer must present a copy of a tax receipt showing that
Texas tax has been previously paid on the vehicle and then indicate on the
title application that his/her Texas residency was not given up permanently,
but only temporarily. Evidence of maintaining Texas residency could include
continuing to vote in Texas or maintaining a Texas address.
When the New Resident Tax Does Not Apply:
The new resident tax does apply to a: Texas resident in military service, or
Vehicle brought into Texas for public highway use by a
person or firm already doing business in Texas, or
Vehicle apprehended for improper registration which is
owned or operated by a person or firm domiciled or doing business in
An interstate owner-operator applying for a Texas title on
an apportioned vehicle
All of these examples are subject to the motor vehicle use
tax, except (4). Interstate motor vehicles are exempt as of September 1,
1997. For more information refer to Chapter 11 - Interstate Motor Carriers.
The tax rate on dealer plates is $25.00 per year per plate.
At the present time there is no tax on manufacturer plates.