Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 3 - TAX ADMINISTRATION › Subchapter F - MOTOR VEHICLE SALES TAX › Section 3.74 - Seller Responsibility

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Definitions. The following words and terms, when used in this section, shall
				  have the following meanings, unless the context clearly indicates otherwise.
(1) Application for Texas Title and/or
				  Registration--Form 130-U, its electronic equivalent, or a successor form,
				  promulgated jointly by the comptroller and the Texas Department of Motor
				  Vehicles, used to apply for a motor vehicle title and registration and to pay
				  any motor vehicle sales or use tax due. The Application for Texas Title and/or
				  Registration is available at comptroller.texas.gov.
(2) Cash discount--An actual reduction of the
				  price required to be paid by the purchaser to the dealer. The term includes,
				  but is not limited to, separately stated manufacturers' rebates, dealers'
				  rebates, and cash rebates passed directly to the purchaser at the time of sale,
				  and discounts allowed for payment within a specified time.
(3) Date of sale--The day the purchaser takes
				  possession of a motor vehicle unless otherwise specified by written
				  agreement.
(4) Dealer--A person who
				  holds a general distinguishing number or operates under similar regulatory
				  requirements of another state or jurisdiction. The term includes a franchised
				  motor vehicle dealer, a nonfranchised motor vehicle dealer, an independent
				  mobility motor vehicle dealer, and a wholesale motor vehicle dealer. The term
				  does not include a salvage vehicle dealer licensed under Occupations Code,
				  Chapter 2302 (Salvage Vehicle Dealers).
(5) Distributor--A person, other than a
				  manufacturer, who:
(A) distributes or sells
				  new motor vehicles to a franchised motor vehicle dealer; or
(B) enters into franchise agreements with
				  franchised motor vehicle dealers, on behalf of the
				  manufacturer.
(6)
				  Extended warranty or service contract--A policy sold to the purchaser of a
				  motor vehicle for an additional amount, the provisions of which become
				  effective after the manufacturer's warranty expires.
(7) Franchised motor vehicle dealer--A person
				  who:
(A) holds a franchised motor vehicle
				  license issued under Occupations Code, Chapter 2301 (Sale or Lease of Motor
				  Vehicles); and
(B) is engaged in
				  the business of buying, selling, or exchanging new motor vehicles at an
				  established and permanent place of business under a franchise agreement with a
				  manufacturer or distributor; or
(C)
				  is licensed under similar regulatory requirements of another state or
				  jurisdiction.
(8)
				  General distinguishing number--A dealer license issued by the Texas Department
				  of Motor Vehicles under Transportation Code, Chapter 503 (Dealer's and
				  Manufacturer's Vehicle License Plates).
(9) Independent mobility motor vehicle
				  dealer--A dealer who is not a franchised motor vehicle dealer who:
(A) holds a general distinguishing number
				  issued by the Texas Department of Motor Vehicles;
(B) holds a converter's license issued under
				  Occupations Code, Chapter 2301;
(C)
				  is engaged in the business of buying, selling, or exchanging mobility motor
				  vehicles defined by Occupations Code, §
												2301.002 (20-a)
				  (Definitions) and servicing or repairing the devices installed on mobility
				  motor vehicles at an established and permanent place of business in Texas;
				  and
(D) is certified by the
				  manufacturer of each mobility device that the dealer installs, if the
				  manufacturer offers that certification.
(10) Lease--An agreement other than a rental,
				  by an owner of a motor vehicle to give for longer than 180 days exclusive use
				  of a motor vehicle to another for consideration. For more information on motor
				  vehicle leases, see §
											3.70
				  of this title (relating to Motor Vehicle Leases and Sales).
(11) Manufacturer--A person who manufactures
				  or assembles new motor vehicles and holds a manufacturer's license issued under
				  Occupations Code, §
											2301.259
				  (Application for Manufacturer's License). The term does not include a person
				  operating only as an ambulance manufacturer, chassis manufacturer,
				  fire-fighting vehicle manufacturer, motor home manufacturer, or a converter as
				  those terms are defined in Occupations Code, §
											2301.002(Definitions).
(12) Motor vehicle--A vehicle described by
				  Tax Code, §
											152.001(3)
				  (Definitions). In general, a motor vehicle
				  includes a self-propelled vehicle designed to transport persons or property
				  upon the public highway and a vehicle designed to be towed by a self-propelled
				  vehicle while carrying property. The term includes, but is not limited to:
				  automobiles; buses; vans; motor homes; motorcycles; trucks and truck tractors;
				  truck cab and chassis; semitrailers; trailers and travel trailers, as defined
				  by §
											3.72
				  of this title (relating to Trailers, Farm Machines, and Timber Machines);
				  trailers sold unassembled in a kit; dollies; jeeps; stingers; auxiliary axles;
				  converter gears; and park models, as defined by §
											3.481
				  of this title (relating to Imposition and Collection of Manufactured Housing
				  Tax). The term does not include a vehicle to which the certificate of title has
				  been surrendered in exchange for a salvage vehicle title or a nonrepairable
				  vehicle title issued under Transportation Code, Chapter 501 (Certificate of
				  Title Act).
(13) New motor
				  vehicle--A motor vehicle that, without regard to mileage, has not been the
				  subject of a retail tax.
(14)
				  Nonfranchised dealer--A person who holds an independent motor vehicle dealer's
				  general distinguishing number, an independent mobility motor vehicle dealer's
				  general distinguishing number, or a wholesale motor vehicle dealer's general
				  distinguishing number issued by the Texas Department of Motor
				  Vehicles.
(15) Related finance
				  company--A person in which at least 80% of the ownership is identical to the
				  ownership of a dealer, as defined by Transportation Code, §
											503.001(Definitions).
(16) Rental--An agreement:
(A) by the owner of a motor vehicle to give
				  exclusive use of that motor vehicle to another for consideration, for a period
				  of time not to exceed 180 days under any one agreement;
(B) by an original manufacturer of a motor
				  vehicle to give exclusive use of the motor vehicle to another for
				  consideration; or
(C) by the owner
				  of a motor vehicle to give exclusive use of the motor vehicle to another for
				  re-rental purposes, regardless of the period of time covered by the
				  agreement.
(17) Retail
				  sale--A sale of a motor vehicle other than:
(A) a sale for resale; or
(B) a sale for lease, meaning a sale to a
				  franchised motor vehicle dealer of a new motor vehicle removed from the
				  franchised motor vehicle dealer's inventory for the purpose of entering into a
				  contract to lease the motor vehicle to another person if, within seven days of
				  executing the lease contract, the franchised motor vehicle dealer transfers
				  title of the motor vehicle and assigns the lease contract to the lessor of the
				  motor vehicle. If the title is not transferred and the lease assigned within
				  seven calendar days, the dealer's purchase and use will be presumed to be a
				  retail purchase and taxable. The presumption may be overcome by showing
				  evidence of intent.
(18)
				  Sale for resale--The sale of a motor vehicle to a purchaser who acquires the
				  motor vehicle either for the exclusive purpose of sale in a manner provided by
				  law, or for purposes allowed by the Texas Department of Motor Vehicles under
				  Transportation Code, Chapter 503, when the purchaser is:
(A) a distributor;
(B) a manufacturer;
(C) a franchised motor vehicle dealer who is
				  authorized by law and by a franchise agreement to offer a motor vehicle for
				  sale as a new motor vehicle; or
(D)
				  a nonfranchised motor vehicle dealer who is authorized by law to offer a motor
				  vehicle for sale as a used motor vehicle.
(E) The following are examples of uses
				  allowed under Transportation Code, Chapter 503, that do not disqualify a
				  purchase as a sale for resale:
(i) when a
				  dealer uses the motor vehicle on public highways with a metal dealer's plate
				  issued under Transportation Code, §
													503.061 (Dealer's
				  License Plates);
(ii) when a
				  manufacturer or distributor removes a motor vehicle from its inventory and
				  tests the motor vehicle on public highways with a manufacturer's plate issued
				  under Transportation Code, §
													503.064
				  (Manufacturer's License Plates); and
(iii) when a manufacturer or distributor
				  loans the motor vehicle to a consumer for a purpose described by Occupations
				  Code, §
													2301.605 (Rebuttable
				  Presumption--Reasonable Number of Attempts).
(19) Seller-financed sale--A retail sale of a
				  motor vehicle by a dealer in which the selling dealer collects all or part of
				  the total consideration in periodic payments and retains a lien on the motor
				  vehicle until all payments have been received. The term does not include a:
(A) retail sale of a motor vehicle in which a
				  person other than the seller provides the total consideration for the sale and
				  retains a lien on the motor vehicle as collateral;
(B) lease; or
(C) rental.
(20) Seller-financed sales tax report--The
				  Texas Motor Vehicle Seller-Financed Sales Tax Report, Form 14-117, its
				  electronic equivalent, or a successor form, promulgated by the comptroller. The
				  seller-financed sales tax report is available at
				  comptroller.texas.gov.
(21) Texas
				  Registration for Motor Vehicle Related Finance Company--Form AP-222, its
				  electronic equivalent, or a successor form, promulgated by the comptroller,
				  used to apply for a related finance company registration. Texas Registration
				  for Motor Vehicle Related Finance Company is available at
				  comptroller.texas.gov.
(22) Total
				  consideration--
(A) The amount paid or to be
				  paid for a motor vehicle and its accessories attached on or before the sale,
				  without deducting:
(i) the cost of the motor
				  vehicle;
(ii) the cost of material,
				  labor or service, interest paid, loss, or any other expense;
(iii) the cost of transportation of the motor
				  vehicle before its sale; or
(iv)
				  the amount of manufacturers' or importers' excise tax imposed on the motor
				  vehicle by the United States.
(B) The amount paid or to be paid includes
				  anything of monetary value, such as cash or the equivalent; a book entry
				  reflecting cash received or paid; the forgiveness or assumption of debt; book
				  entries reflecting accounts receivable or accounts payable for an item; the
				  performance of a service; or real or tangible personal property.
(C) The term does not include:
(i) separately stated cash
				  discounts;
(ii) a full cash or
				  credit refund to a customer of the sales price of, meaning the amount paid for,
				  a motor vehicle that the customer returns to the seller;
(iii) the amount charged for labor or service
				  rendered in installing, applying, remodeling, or repairing the motor vehicle
				  sold;
(iv) separately stated
				  finance or interest charges on credit extended under a conditional sale or
				  other deferred payment contract;
(v) the value of a motor vehicle taken by a
				  seller as all or a part of the consideration for sale of another motor
				  vehicle;
(vi) the fair market value
				  of a motor vehicle titled in Texas in the name of a dealer or a person who is
				  in the business of renting or leasing motor vehicles, as provided by §
													3.73
				  of this title (relating to Qualifying for Fair Market Value Deduction and
				  Determination of Fair Market Value for Replaced Vehicles);
(vii) a charge for transportation of the
				  motor vehicle after the sale of the motor vehicle;
(viii) motor vehicle inventory tax,
				  separately stated charges to prepare and process documents related to the
				  transfer of a motor vehicle, fees to register and/or apply for a certificate of
				  title, fees or charges prescribed by law in connection with the sale or
				  inspection of the motor vehicle, and any additional fees charged by the deputy
				  of a county tax assessor-collector; or
(ix) separately stated charges for the sale
				  of an extended warranty, maintenance agreement, service contract, insurance,
				  automobile club membership, roadside assistance program, or a debt cancellation
				  agreement.
(23) Wholesale motor vehicle dealer--A dealer
				  who sells motor vehicles only to persons who hold a dealer's general
				  distinguishing number.