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

Student Motor Vehicle With
Out-of-State Plates
• Reciprocity Agreements for Registration
• Taxability
Reciprocity Agreements for Registration
Non-resident students attending colleges, universities
or private high schools in Texas are able to operate
their motor vehicles on their home state plates through
TxDMV reciprocity agreements. These reciprocity
agreements do not address tax liability.
Taxability
Non-resident students moving to Texas owe the new
resident tax if they bring a motor vehicle registered in
the student’s name in another state or foreign country
into Texas, or bring a motor vehicle leased in another
state or foreign country prior to moving to Texas.
(The lessor must have purchased the motor vehicle out
of state.)
Students that do not qualify as new residents owe the
motor vehicle use tax.
Total Consideration
• Tax is Imposed on the Total Consideration
• Total Consideration
• Deductions from Total Consideration
• Substitution of Collateral or Transfer of Equity
• Rebates
• Liens
• Proof of Total Consideration
• Purchase Price Not Available
Tax is Imposed on the Total
Consideration
Texas law imposes motor vehicle sales and use tax
on the total consideration paid, or to be paid, for a
motor vehicle.
Total consideration includes anything given as payment
and includes the receipt of a boat, airplane, land,
livestock, services, labor, cash or the assumption of a
lien or debt.
Total Consideration
The following items are part of total consideration (i.e.,
taxable) and are not deductions from the selling price:
• cost of the motor vehicle;
• cost of material, labor, service, interest, loss or
any other expense;
• all accessories or attachments that are affixed to it
at the time of sale;
• cost of transportation of the motor vehicle prior
to its sale or purchase; and
• taxes imposed in the chain of distribution
prior to the sale, such as the importer excise tax
assessed by the United States.
Deductions from Total Consideration
The following items are not part of total consideration
(i.e., not taxable) and are deductions from the selling
price:
• manufacturer rebates;
• cash discounts or rebates allowed on a sale;
• sales price of a motor vehicle returned by a
customer when the seller refunds the full sales
price either in cash or credit (failure of sale);
• amount charged for labor or services rendered
in installing, remodeling or repairing the motor
vehicle after the sale;
• amount charged for finance charges, carrying
charges, service charges or interest from credit
extended on sale of a motor vehicle under a
conditional sales contract or other contract
providing for deferred payment of the purchase
price;
• value of a motor vehicle taken in trade as all or
part of the consideration for the other motor
vehicle;
• charges for transportation of a motor vehicle
after the sale;
• charges for an extended service contract
(warranty) or maintenance agreement;
• charges for roadside assistance programs, which
are services performed after the sale, such as
jump-starting a battery, unlocking a door,
changing a flat tire or providing towing;
• federal retail sales tax (imposed on heavy trucks;
often referred to as federal excise tax);
• separately stated charge for preparing and
processing documents related to the transfer of a
motor vehicle, usually called a documentary fee;
Motor Vehicle Tax Guidebook
III-25