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

same lessee. The credit is limited to tax paid prior to
the motor vehicle’s entry into Texas. Credit cannot be
allowed at time of registration for tax payments not
yet made to the other state. At the end of the lease,
however, the lessee may request a refund from the
Comptroller of up to the amount of additional tax paid
to the other state.
Calculating Tax Due on Vehicle Purchased
Outside Texas
Dealers
Example:
Total Sales Price $ 15,000
Less Trade-In – 6,000
Taxable Value $ 9,000
Tax Rate x .0625
Use Tax Due $ 562.50
Less credit for
tax paid in
another state – 180.00
Net Texas Use Tax $ 382.50
• Tax Collection - Dealer Responsibility
• Motor Vehicles Acquired for Resale
• Franchised Dealer
• Non-Franchised Dealer
• Lienholders
• Dealer License Plate - Use of Vehicle Advertising
Claims to Waive Taxes
Tax Collection - Dealer Responsibility
Texas law requires licensed motor vehicle dealers
to collect motor vehicle sales tax on taxable sales,
including cash sales. Dealers must remit motor vehicle
sales tax to the county TAC within 20 county working
days (60 county working days for sales made to active
duty military). Dealers have no collection responsibility
when the gross weight of the motor vehicle is more
than 11,000 pounds or when the motor vehicle is a
non-titled trailer.
SPV does not apply when a licensed dealer is a party to
the sale.
When documents show that a purchaser paid tax to a
dealer, yet the dealer failed to transfer title and submit
the tax as required, the purchaser will not be liable
for the tax again when the title is finally transferred.
The purchaser, however, must provide acceptable
documentation that the purchaser paid the tax to the
dealer. Acceptable documentation includes a dealer’s
invoice or sales contract that itemizes the tax paid to
the dealer.
The county TAC can contact the Comptroller with
information on dealers who appear to be violating their
motor vehicle tax collection responsibilities.
Consignment sales of motor vehicles by licensed
dealers are dealer sales for tax purposes. All dealer tax
responsibility addressed in this topic applies to those
consignment sales. SPV, consequently, does not apply.
Motor Vehicles Acquired for Resale
Franchised Dealer
Only licensed motor vehicle dealers authorized to sell
new motor vehicles may acquire a new motor vehicle
for resale tax free, provided the new motor vehicle is the
same make of motor vehicle they are franchised to sell.
Dealers authorized to sell new motor vehicles may
acquire a new motor vehicle with an MCO for resale
tax free, but only for the make of motor vehicle they are
franchised to sell. If the franchised dealer purchases a
new vehicle that the dealer is not franchised to sell, the
dealer owes motor vehicle tax even if the motor vehicle
is being held strictly for resale.
A Texas franchised dealer may acquire any brand of
used motor vehicle for resale and will not owe motor
vehicle tax on that acquisition.
A franchised dealer may lease a motor vehicle from
its inventory without incurring a motor vehicle tax
liability, provided the dealer immediately transfers the
motor vehicle and the lease to another lessor. Tax is
collected from the second lessor.
Non-licensed entities—whether individuals,
corporations or other entities—owe tax on purchases
of motor vehicles, even if the purchases are for resale
purposes only.
Non-Franchised Dealer
A non-franchised dealer (independent dealer) may
acquire any brand of used motor vehicle for resale and
not owe motor vehicle tax.
Motor vehicle tax is due on the purchase of a new
motor vehicle when purchased by an independent
motor vehicle dealer or a dealer franchised to sell a
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Motor Vehicle Tax Guidebook