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

If there is an executor/executrix, the executor/executrix
should sign the gift affidavit, Form 14-317, Affidavit of
Motor Vehicle Gift Transfer.
Liens or Other Consideration on
Inherited Vehicle
If the heir assumes a debt or gives other consideration
to the estate of the deceased person to whom the
inherited motor vehicle belonged, motor vehicle tax
is due and SPV of the vehicle may apply.
Note: The estate may owe motor vehicle tax on
any motor vehicle that has not been previously
titled and registered and on which tax has not been
previously paid.
Transfers by Descendants
When a motor vehicle is transferred by the heir(s)
of a deceased person to another person, two taxable
transactions have taken place. First, the heir(s) owes
tax on acquiring the vehicle from the estate. Second,
the person receiving the vehicle from the heir(s) also
owes tax.
Insurance Settlement
Transfers
• Insurance Company Taking Title
• Sale of Total Loss Vehicle
• Sale of Repaired Vehicle
• Replacement Motor Vehicle
Insurance Company Taking Title
No sale has occurred when an insurance company
obtains title to a motor vehicle in return for an
insurance settlement.
Motor vehicle tax is not due when an insured motor
vehicle is titled in the insurance company’s name
because the insurance company determines it to be
a total loss or stolen, even if the stolen motor vehicle
is later recovered.
Sale of Total Loss Vehicle
Motor vehicle tax is not due on the sale of a vehicle
that has been declared a total loss by the insurance
company pursuant to the settlement or adjustment of an
insurance claim. Instead, limited sales and use tax is due
because a vehicle declared a total loss by the insurance
company is not a motor vehicle, as provided by Tax
Code Section 152.001(4)(F), even if the vehicle still
retains its regular title under the Transportation Code.
A retailer who holds a Texas limited sales and use
tax permit (or a similar permit for another state) may
issue a sales and use tax resale certificate to purchase a
total loss vehicle tax free for the purposes of reselling
that unit.
Motor vehicle tax is not due when the purchaser
of a total loss vehicle repairs the vehicle so that it is
eligible to be a motor vehicle again and then titles it
in that purchaser’s name. The county TAC can request
documentation from the purchaser that the vehicle was
a vehicle declared a total loss by the insurance company.
Sale of Repaired Total Loss Vehicle
The sale and any subsequent sales of a repaired total loss
vehicle are subject to motor vehicle tax.
Replacement Motor Vehicle
Motor vehicle tax is due when an insurance company
purchases a replacement motor vehicle for an insured
person as a result of a claim for total loss or an insured
person purchases a replacement motor vehicle with
insurance settlement money. A purchaser cannot use an
insurance cash settlement to reduce the taxable amount
of a replaced motor vehicle. SPV applies if the purchase
of the replacement motor vehicle is a private-party
purchase and the transaction does not involve a licensed
motor vehicle dealer.
Kits
• Complete Car Kits or Trailer Kits
• Glider Kits
Complete Car Kits or Trailer Kits
Sales of kits that do not contain an entire motor vehicle
(e.g., contain body only) are subject to the limited sales
and use tax, which the seller collects. The TAC has no
responsibility to determine whether limited sales and
use tax has been paid.
When a person purchases a complete car kit or
trailer kit, that contains all the component parts of
a motor vehicle, and assembles the components into
a motor vehicle, motor vehicle tax is due at the time
of registration. Tax is based on the purchase price of
the kit.
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Motor Vehicle Tax Guidebook