Motor Vehicle Tax Guidebook 2011 - Texas Comptroller of Public ...

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Texas Emissions Reduction Plan (TERP) Surcharge • What is TERP • TERP Surcharge • TERP Surcharge Rate • Dealer Responsibility • County Responsibility What is TERP The Texas Legislature created the Texas Emissions Reduction Plan (TERP) to provide grants and other incentives for improving air quality throughout the state and to comply with federal Environmental Protection Agency air quality standards. The TERP provides funding for cleaner on-road and off-road engines, energy efficiency programs, cleaner fuels and other infrastructure programs, as well as for research and development of related new technologies. TERP Surcharge This surcharge applies to the purchase of dieselpowered, on-road motor vehicles with a gross motor vehicle registered weight exceeding 14,000 pounds. The TERP surcharge applies to both new and used dieselpowered motor vehicles, whether purchased inside or outside Texas. The TERP surcharge does not apply to motor vehicles operated with gasoline, compressed natural gas (CNG) or liquefied petroleum gas (LPG). Excluded from this surcharge are recreational vehicles (RVs) with a gross motor vehicle registered weight exceeding 14,000 pounds that are not held or used for the production of income. TERP Surcharge Rate The surcharge rate for the purchase or use of motor vehicles for model years 1996 and earlier is 2.5 percent, while the rate for model years 1997 and newer is 1 percent. The surcharge is due at the time of titling and registration. The TERP surcharge is calculated on the sales price less the value of any trade-in or valid fair market value deductions to reduce the sales price. SPV applies in private-party purchases. Dealer Responsibility Dealers should collect the TERP surcharge on affected motor vehicles at the same time and in the same manner as registration fees and motor vehicle tax. Dealers pay the surcharge to the county TAC at the time of titling and registration, just like motor vehicle tax, and late payment penalty applies. Seller-financed dealers must collect the surcharge, when applicable, on payments and report surcharge collections on the same return used to report motor vehicle tax, Form 14-117, Texas Motor Vehicle Seller- Financed Sales Tax and/or Surcharge Report. County Responsibility TxDMV includes the TERP surcharges in the RTS and separately identifies the surcharge. The TERP is administered in the same manner as motor vehicle tax. The same exemptions for motor vehicles, including the interstate exemption for certain heavy trucks and trailers, apply to the TERP surcharge. Purchases of motor vehicles for rental use are subject to the surcharge. The surcharge is due at the time of titling and registration and cannot be deferred. The surcharge does not apply to rental contracts. Funding for the TERP also includes a 10 percent surcharge on commercial truck registration fees and a portion of the title application fee (from some counties) as prescribed by the Texas Transportation Code. These are remitted directly to the Comptroller by the county TAC. II-10 Motor Vehicle Tax Guidebook
Section III Specific Provisions Accessories and Attachments Affixed to a Motor Vehicle • Tax Due at Time of Sale • Three Situations and Tax Consequences • Accessories/Attachments Affixed at the Time of Sale • Accessories/Attachments Purchased Separately • Accessories/Attachments Purchased to Combine into a Homemade or Shop-Made Motor Vehicle Tax Due at Time of Sale Motor vehicle tax is due on the consideration paid or to be paid for a motor vehicle, including all accessories or attachments affixed at the time of sale. Accessories/Attachments Affixed at the Time of Sale Motor vehicle tax is due on the total selling price of a motor vehicle with affixed accessories or attachments. Example 1: A customer orders a truck with a tool box and grill guard accessories attached. The customer pays motor vehicle tax on the truck, the tool box, grill guard and any other attached accessories. Examples of accessories include items such as a sideview mirror, trailer hitch or grill guard. Examples of attachments include a major piece of equipment that performs a function, such as a concrete mixer or an air compressor. To determine the amount of tax due on a motor vehicle, it is necessary to determine what accessories or attachments were affixed to the motor vehicle at time of purchase. A person may purchase a motor vehicle and accessories/attachments separately, but then combine them before the person actually registers the motor vehicle. Three Situations and Tax Consequences Three situations can occur with the purchase of a motor vehicle and accessories/attachments: • accessories/attachments are affixed to the motor vehicle at the time of sale; • accessories/attachments are purchased separately from the motor vehicle; or • accessories/attachments are purchased to combine into a homemade or shop-made motor vehicle. The following sections address each of these situations and the resulting tax consequences. INVOICE Ajax Motors Austin, Texas Crew Cab $30,900 Tool Box 350 Grill Guard 750 Total 32,000 Motor Vehicle Sales Tax 6.25% 2,000 Final Total $34,000 Accessories/Attachments Purchased Separately When a buyer purchases a motor vehicle and then purchases unattached accessories separately, motor vehicle tax is due on the motor vehicle’s selling price. Limited sales tax is due on the selling price of the unattached accessories. The buyer may purchase the motor vehicle and the accessories from different sellers Motor Vehicle Tax Guidebook III-1
Page 1: Susan Combs Texas Comptroller of Pu
Page 4 and 5: ii Motor Vehicle Tax Guidebook
Page 6 and 7: Manufactured Housing and Mobile Hom
Page 8 and 9: County Working Day - A day in which
Page 10 and 11: Mobile Office - A trailer designed
Page 12 and 13: Seller-Financed Dealer - A dealer w
Page 14 and 15: xii Motor Vehicle Tax Guidebook
Page 16 and 17: Signing a False Tax Statement A per
Page 18 and 19: I-4 Motor Vehicle Tax Guidebook
Page 20 and 21: Trade-In Allowance If a purchaser t
Page 22 and 23: SPV Examples The following examples
Page 24 and 25: Active duty military personnel have
Page 26 and 27: Even Trade Transfer Tax • Tax Amo
Page 30 and 31: or from the same seller at differen
Page 32 and 33: Transfers from Subsidiary to Subsid
Page 34 and 35: • If a partner assumes a lien on
Page 36 and 37: winning ticket. Nor does the contes
Page 38 and 39: same lessee. The credit is limited
Page 40 and 41: Motor Vehicle Requirements For the
Page 42 and 43: If there is an executor/executrix,
Page 44 and 45: If the lessee is paying tax on leas
Page 46 and 47: Manufacturers of Motor Vehicles •
Page 48 and 49: Moveable Specialized Equipment Ligh
Page 50 and 51: no title is required. The sale date
Page 52 and 53: Seller-Financed Sales • Defined
Page 54 and 55: • reimbursement charges for the d
Page 56 and 57: motor vehicle seller. If the seller
Page 58 and 59: III-30 Motor Vehicle Tax Guidebook
Page 60 and 61: The county TAC can also request tha
Page 62 and 63: Example: Fertilizer Spreader: Not a
Page 64 and 65: Orthopedically Handicapped Persons
Page 66 and 67: Lease to a Public Agency A lessor/p
Page 68 and 69: IV-10 Motor Vehicle Tax Guidebook
Page 70 and 71: Bond Requirements • State Law •
Page 72 and 73: The county TAC reports on Form 14-1
Page 74 and 75: Who to Call • Comptroller Departm
Page 76 and 77: V-8 Motor Vehicle Tax Guidebook
Page 78:
VI-2 Motor Vehicle Tax Guidebook
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Motor Vehicle Tax Guidebook 2011 - Texas Comptroller of Public ...

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