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

The county TAC reports on Form 14-115 the state’s
portion of the earned interest each month.
When comingled accounts are used, the county TAC
may determine the interest by retaining a daily balance
of state motor vehicle tax funds waiting to be remitted
to the Comptroller and then applying the daily interest
rate to compute the interest earned and due the state.
An alternative method used by some county TACs is
to use the ratio of state tax motor vehicle deposits to
other county fund deposits (such as state and local
registration fees) in the interest bearing account to
determine the ratio percentage of interest earned on the
state funds. The formula, based on the bank statement
period, is motor vehicle tax deposits divided by total
deposits, multiplied by amount of interest paid. This
alternative method, however, may result in the county
not retaining its proper share of the interest, since
the float allowance for state registration fees due to
TxDMV is 34 days compared to a shorter period for
state motor vehicle tax.
Commission
• Tax Components
• Commission Calculation and Source
• Annual Notification
• Reporting Guidelines
• Depositing the Commission
Tax Components
County TACs receive an annual commission from
the state for their efforts in collecting motor vehicle
tax. The commission is equal to 5 percent of the tax
and penalties collected for motor vehicles sales, sellerfinanced
sales and Texas Emissions Reduction Plan
(TERP) surcharges for the county during the preceding
calendar year.
Commission Calculation and Source
The commission is retained from a combination of
motor vehicle registration fees, motor vehicle tax
collections and TERP surcharges. Each year, the
percentage of the tax commission retained from the
tax sources will increase until 2015, when TACs will
retain the total 5 percent motor vehicle tax commission
entirely from the motor vehicle tax and TERP
surcharges.
Tax Code Section 152.123 and Transportation Code
Section 502.1025 set forth the schedule:
Retained
Retained from
Year From Tax & TERP Registration Fees
2006 10 percent 90 percent
2007 20 percent 80 percent
2008 30 percent 70 percent
2009 40 percent 60 percent
2010 50 percent 50 percent
2011 60 percent 40 percent
2012 70 percent 30 percent
2013 80 percent 20 percent
2014 90 percent 10 percent
2015 100 percent 0 percent
Using 2011 as an example, the formula used to
determine the amount to retain from tax collections
and TERP will be:
(2010 MV tax collections + seller-financed collections
+ TERP surcharges) x 0.05 x 0.60 = amount from tax.
(The remaining .40 will come from registration fees.)
Counties that have insufficient registration revenue
to cover the portion of motor vehicle tax commission
that comes from registration fees, may retain the
commission amount directly from motor vehicle tax.
Annual Notification
Once motor vehicle sales tax returns for the preceding
calendar year are processed, the Comptroller will
notify each county TAC by letter of the exact amount
of commission and the amounts to be retained from
motor vehicles sales and use tax collections and TERP
surcharges. This notification cannot be made until all
counties have filed reports for the preceding calendar
year and the reports have been processed.
Reporting Guidelines
County TACs must report on Form 14-115, Texas
Motor Vehicle Sales/Use Tax and Surcharge Report,
the amount of commission retained. Item 8A on the
report should reflect the commission amount retained
from motor vehicle tax collections and Item 8B should
reflect the commission amount retained from TERP
surcharges.
TACs can retain the total commission due for the year
on one month’s report if there are sufficient collections
to report for that month. Otherwise, a TAC should
V-4 Motor Vehicle Tax Guidebook