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

The only time motor vehicle tax is not due on a
homemade or shop-made motor vehicle is when the
person who actually built the motor vehicle initially
titles it. Once the person who built the motor vehicle
has titled or registered it, motor vehicle tax is due on
any subsequent sales.
Motor vehicle tax is due from the person who custom
orders a motor vehicle because someone else is the
actual builder.
Business Entities —
Corporations and Limited
Liability Companies (LLCs)
• General Characteristics
• Transfers Between Corporations and
Stockholders
• Transfers Between Parent and Subsidiary
Corporations
• Transfers from Subsidiary to Subsidiary
• Incorporation of a Partnership or a Sole
Ownership
• Transfer from Existing Corporation to Newly
Formed Subsidiary Corporation
• Transfer Upon Dissolution/Termination
• Transfer Due to a Merger or Conversion
• Corporate Name Change
• Lien Assumption
• Corporation as a New Resident
General Characteristics
NOTE: Limited Liability Companies (LLCs) are
treated the same as corporations for the purpose of
motor vehicle tax. When reading this text, the term
“corporation” also includes an LLC.
A corporation may own property, engage in business
and be held liable for its debts as a legal entity separate
and apart from its stockholders. Corporate stock may
be bought and sold without affecting the tax status of
a motor vehicle titled in the corporate name. When a
corporation acquires or sells a motor vehicle, however,
motor vehicle tax is due.
Transfers Between Corporations
and Stockholders
When an individual stockholder in a corporation
transfers a motor vehicle from his or her name to the
corporate name or the corporation transfers a motor
vehicle to the stockholder, the following guidelines
apply:
• If the corporation or stockholder pays
consideration for the motor vehicle, motor
vehicle tax is due. SPV procedures may apply.
• If the corporation or stockholder pays no
consideration for the motor vehicle, there is a
transfer without payment of consideration. Tax
is due on the vehicle and SPV procedures may
apply. The transfer cannot qualify as a gift.
Exception: See Incorporation of a Partnership
or a Sole Ownership in this topic.
Transfers between an individual and an unincorporated
company owned solely by that individual are treated
differently.
Transfers Between Parent and
Subsidiary Corporations
When a parent corporation transfers a motor vehicle
to a subsidiary corporation or a subsidiary corporation
transfers a motor vehicle to its parent corporation, the
following guidelines apply:
• If the subsidiary or parent corporation paid
consideration for the motor vehicle, motor
vehicle tax is due. SPV procedures may apply.
• If the subsidiary or parent corporation paid no
consideration for the motor vehicle, a sale has
occurred even without payment of consideration.
SPV procedures may apply. The transfer cannot
qualify as a gift.
Exception: See Transfer from Existing Corporation
to Newly Formed Subsidiary Corporation in this
topic.
Motor Vehicle Tax Guidebook
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