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

Manufacturers of Motor
Vehicles
• No Tax Due
• Tax Due on Related Company Purchase
• Renting or Leasing
No Tax Due
Motor vehicle tax is not due if a motor vehicle is titled
and registered in the manufacturer’s name. No sale of a
motor vehicle has occurred.
Tax Due on Related Company Purchase
Motor vehicle tax is due if a motor vehicle is titled
and registered in the name of a company related to a
manufacturer. For example, motor vehicle tax is due if
the motor vehicle is titled and registered in the name
of the manufacturer’s finance arm. Motor vehicle
tax is also due if the motor vehicle is titled to a U.S.
distributor of a foreign built vehicle (i.e., the vehicle is
not purchased for resale).
Renting or Leasing
All agreements by a manufacturer to give exclusive
use of a motor vehicle to another for a consideration
are rentals and the manufacturer should use the rental
permit number to register these motor vehicles tax free.
This includes long term contracts that would otherwise
qualify as a lease agreement.
A manufacturer must collect gross rental receipts tax
and report it to the Comptroller.
Military Personnel
• Subject to Tax
• Texas Military Personnel
• Out-of-State Military Personnel
• Credit
• Deadline for Titling, Registration and Tax
Payment
Subject to Tax
Vehicles purchased by U.S. military personnel and most
foreign military personnel are subject to motor vehicle
sales and use tax. The Servicemember’s Civil Relief Act
(formerly known as the Soldier and Sailor’s Relief Act),
which exempts the U.S. military from some state and
local property and income taxes, does not apply to
motor vehicle taxes. There is no exemption from motor
vehicle tax because the motor vehicle was purchased in
another state, overseas or through a base exchange.
Whether the owner (military personnel) is an
established Texas resident or a new resident and where
the owner purchased the motor vehicle will determine
whether the owner will pay motor vehicle sales tax, use
tax or new resident tax when the owner registers the
motor vehicle.
Foreign military personnel, their dependents and
military-employed civilians attached to a North
Atlantic Treaty Organization (NATO) force are exempt
from the motor vehicle sales and use tax.
Texas Military Personnel
When a military person with Texas as the home state
of record purchases a motor vehicle in Texas, motor
vehicle sales tax is due. 6.25 percent Texas motor
vehicle use tax is due on a vehicle purchased outside of
this state, SPV may apply.
A Texas military person who is stationed outside
Texas, but chooses to register a vehicle in Texas, is also
subject to motor vehicle tax, since the motor vehicle is
presumed to be for use in Texas.
Another state may require its state registration on a
Texas motor vehicle owned by a Texas resident who
is in that state temporarily on military orders, even
though the Texas resident previously registered and
paid tax on the vehicle in Texas. If this is the case, there
is no liability for any additional tax when the resident
re-enters Texas with the same motor vehicle. Proof of
tax paid to Texas or previous titling in Texas is required
when the vehicle returns to Texas.
Out-of-State Military Personnel
Out-of-state U.S. and foreign military personnel
(excluding foreign NATO personnel) who enter Texas
pay the new resident tax on motor vehicles purchased
outside Texas and brought into Texas for use. The
military person must have previously registered the
motor vehicle in the military person’s name in another
state or foreign country. U.S. military registration is
qualified registration. If the registration requirement is
not met, 6.25 use tax is due. SPV may apply.
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Motor Vehicle Tax Guidebook