|(a) Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Application for Texas Title and/or Registration--Form
130-U, its electronic equivalent, or a successor form, promulgated
jointly by the comptroller and the Texas Department of Motor Vehicles,
used to apply for a motor vehicle title and registration and to pay
any motor vehicle sales or use tax due. The Application for Texas
Title and/or Registration is available at comptroller.texas.gov.
(2) Cash discount--An actual reduction of the price
required to be paid by the purchaser to the dealer. The term includes,
but is not limited to, separately stated manufacturers' rebates, dealers'
rebates, and cash rebates passed directly to the purchaser at the
time of sale, and discounts allowed for payment within a specified
(3) Date of sale--The day the purchaser takes possession
of a motor vehicle unless otherwise specified by written agreement.
(4) Dealer--A person who holds a general distinguishing
number or operates under similar regulatory requirements of another
state or jurisdiction. The term includes a franchised motor vehicle
dealer and an independent motor vehicle dealer. The term does not
include a salvage vehicle dealer licensed under Occupations Code,
Chapter 2302 (Salvage Vehicle Dealers).
(5) Distributor--A person, other than a manufacturer,
(A) distributes or sells new motor vehicles to a franchised
motor vehicle dealer; or
(B) enters into franchise agreements with franchised
motor vehicle dealers, on behalf of the manufacturer.
(6) Extended warranty or service contract--A policy
sold to the purchaser of a motor vehicle for an additional amount,
the provisions of which become effective after the manufacturer's
(7) Franchised motor vehicle dealer--A dealer who:
(A) holds a franchised motor vehicle license issued
under Occupations Code, Chapter 2301 (Sale or Lease of Motor Vehicles);
(B) is engaged in the business of buying, selling,
or exchanging new motor vehicles at an established and permanent place
of business under a franchise agreement with a manufacturer or distributor;
(C) is licensed under similar regulatory requirements
of another state or jurisdiction.
(8) General distinguishing number--A dealer license
issued by the Texas Department of Motor Vehicles under Transportation
Code, Chapter 503 (Dealer's and Manufacturer's Vehicle License Plates).
(9) Independent motor vehicle dealer--A dealer who
is not a franchised motor vehicle dealer, an independent mobility
motor vehicle dealer, or a wholesale motor vehicle dealer.
(10) Lease--An agreement other than a rental, by an
owner of a motor vehicle to give for longer than 180 days exclusive
use of a motor vehicle to another for consideration. For more information
on motor vehicle leases, see §3.70 of this title (relating to
Motor Vehicle Leases and Sales).
(11) Manufacturer--A person who manufactures or assembles
new motor vehicles and holds a manufacturer's license issued under
Occupations Code, §2301.259 (Application for Manufacturer's License).
The term does not include a person operating only as an ambulance
manufacturer, chassis manufacturer, fire-fighting vehicle manufacturer,
motor home manufacturer, or a converter as those terms are defined
in Occupations Code, §2301.002 (Definitions).
(12) Motor vehicle--A vehicle described by Tax Code,
§152.001(3) (Definitions). In general, a motor vehicle includes
a self-propelled vehicle designed to transport persons or property
upon the public highway and a vehicle designed to be towed by a self-propelled
vehicle while carrying property. The term includes, but is not limited
to: automobiles; buses; vans; motor homes; motorcycles; trucks and
truck tractors; truck cab and chassis; semitrailers; trailers and
travel trailers, as defined by §3.72 of this title (relating
to Trailers, Farm Machines, and Timber Machines); trailers sold unassembled
in a kit; dollies; jeeps; stingers; auxiliary axles; converter gears;
and park models, as defined by §3.481 of this title (relating
to Imposition and Collection of Manufactured Housing Tax). The term
does not include a vehicle to which the certificate of title has been
surrendered in exchange for a salvage vehicle title or a nonrepairable
vehicle title issued under Transportation Code, Chapter 501 (Certificate
of Title Act).
(13) New motor vehicle--A motor vehicle that, without
regard to mileage, has not been the subject of a retail tax.
(14) Rental--An agreement:
(A) by the owner of a motor vehicle to give exclusive
use of that motor vehicle to another for consideration, for a period
of time not to exceed 180 days under any one agreement;
(B) by an original manufacturer of a motor vehicle
to give exclusive use of the motor vehicle to another for consideration;
(C) by the owner of a motor vehicle to give exclusive
use of the motor vehicle to another for re-rental purposes, regardless
of the period of time covered by the agreement.
(15) Retail sale--A sale of a motor vehicle other than:
(A) a sale for resale; or
(B) a sale for lease, meaning a sale to a franchised
motor vehicle dealer of a new motor vehicle removed from the franchised
motor vehicle dealer's inventory for the purpose of entering into
a contract to lease the motor vehicle to another person if, within
seven days of executing the lease contract, the franchised motor vehicle
dealer transfers title of the motor vehicle and assigns the lease
contract to the lessor of the motor vehicle. If the title is not transferred
and the lease assigned within seven calendar days, the dealer's purchase
and use will be presumed to be a retail purchase and taxable. The
presumption may be overcome by showing evidence of intent.
(16) Sale for resale--The sale of a motor vehicle to
a purchaser who acquires the motor vehicle either for the exclusive
purpose of sale in a manner provided by law, or for purposes allowed
by the Texas Department of Motor Vehicles under Transportation Code,
Chapter 503, when the purchaser is:
(A) a distributor;
(B) a manufacturer;
(C) a franchised motor vehicle dealer who is authorized
by law and by a franchise agreement to offer a motor vehicle for sale
as a new motor vehicle; or
(D) an independent motor vehicle dealer who is authorized
by law to offer a motor vehicle for sale as a used motor vehicle.
(E) The following are examples of uses allowed under
Transportation Code, Chapter 503, that do not disqualify a purchase
as a sale for resale:
(i) when a dealer uses the motor vehicle on public
highways with a metal dealer's plate issued under Transportation Code,
§503.061 (Dealer's License Plates);
(ii) when a manufacturer or distributor removes a motor
vehicle from its inventory and tests the motor vehicle on public highways
with a manufacturer's plate issued under Transportation Code, §503.064
(Manufacturer's License Plates); and
(iii) when a manufacturer or distributor loans the
motor vehicle to a consumer for a purpose described by Occupations
Code, §2301.605 (Rebuttable Presumption--Reasonable Number of
(17) Seller-financed sale--A retail sale of a motor
vehicle by a dealer in which the selling dealer collects all or part
of the total consideration in periodic payments and retains a lien
on the motor vehicle until all payments have been received. The term
does not include a:
(A) retail sale of a motor vehicle in which a person
other than the seller provides the total consideration for the sale
and retains a lien on the motor vehicle as collateral;
(B) lease; or
(18) Seller-financed sales tax report--The Texas Motor
Vehicle Seller-Financed Sales Tax Report, Form 14-117, its electronic
equivalent, or a successor form, promulgated by the comptroller. The
seller-financed sales tax report is available at comptroller.texas.gov.
(19) Total consideration--
(A) The amount paid or to be paid for a motor vehicle
and its accessories attached on or before the sale, without deducting:
(i) the cost of the motor vehicle;
(ii) the cost of material, labor or service, interest
paid, loss, or any other expense;
(iii) the cost of transportation of the motor vehicle
before its sale; or
(iv) the amount of manufacturers' or importers' excise
tax imposed on the motor vehicle by the United States.
(B) The amount paid or to be paid includes anything
of monetary value, such as cash or the equivalent; a book entry reflecting
cash received or paid; the forgiveness or assumption of debt; book
entries reflecting accounts receivable or accounts payable for an
item; the performance of a service; or real or tangible personal property.
(C) The term does not include:
(i) separately stated cash discounts;
(ii) a full cash or credit refund to a customer of
the sales price of, meaning the amount paid for, a motor vehicle that
the customer returns to the seller;
(iii) the amount charged for labor or service rendered
in installing, applying, remodeling, or repairing the motor vehicle
(iv) separately stated finance or interest charges
on credit extended under a conditional sale or other deferred payment
(v) the value of a motor vehicle taken by a seller
as all or a part of the consideration for sale of another motor vehicle;
(vi) the fair market value of a motor vehicle titled
in Texas in the name of a dealer or a person who is in the business
of renting or leasing motor vehicles, as provided by §3.73 of
this title (relating to Qualifying for Fair Market Value Deduction
and Determination of Fair Market Value for Replaced Vehicles);
(vii) a charge for transportation of the motor vehicle
after the sale of the motor vehicle;
(viii) motor vehicle inventory tax; or
(ix) separately stated charges for the sale of an extended
warranty or service contract.
(b) Motor vehicle seller-financed sales tax permit.
Every dealer making seller-financed sales must apply to the comptroller
and obtain a Motor Vehicle Seller-Financed Sales Tax Permit.
(1) To obtain a permit, the dealer must complete a
Texas Application for Motor Vehicle Seller-Financed Sales Tax Permit,
Form AP-169, its electronic equivalent, or its successor, promulgated
by the comptroller. The application is available at comptroller.texas.gov.
(2) A separate permit is not required for each location.
The comptroller issues one Motor Vehicle Seller-Financed Sales Tax
Permit to each dealer making seller-financed sales, regardless of
the number of locations or dealerships the dealer operates.
(3) Each dealer (corporation, partnership, sole proprietor,
etc.) must apply for its own permit. The permit cannot be transferred
from one dealer to another.
(c) Collection and remittance of motor vehicle tax.
(1) Seller-financed sales.
(A) A dealer who makes a seller-financed sale must
apply to the appropriate county tax assessor-collector to title and
register the motor vehicle by filing an Application for Texas Title
and/or Registration no later than the 45th day after the date the
motor vehicle is delivered to the purchaser.
(B) A dealer making a seller-financed sale must also:
(i) collect and remit motor vehicle tax on the total
consideration for the motor vehicle at the time the Application for
Texas Title and/or Registration is presented to the county tax assessor-collector;
(ii) collect and remit the motor vehicle tax to the
comptroller as the payments are received, as explained in subsection
(d) of this section. A dealer making a seller-financed sale must include
its 11-digit Seller-Financed Sales Tax Permit Number on the Application
for Texas Title and/or Registration if the dealer intends to remit
the motor vehicle tax on a report to the comptroller instead of remitting
the motor vehicle tax at the time the Application for Texas Title
and/or Registration is presented to the county tax assessor-collector.
(2) Retail sales other than seller-financed sales.
(A) A dealer must collect motor vehicle tax on each
retail sale, unless an exemption applies. The tax is imposed on the
total consideration for the motor vehicle.
(B) The dealer must remit the motor vehicle tax due
to the appropriate county tax assessor-collector at the time the dealer
submits the Application for Texas Title and/or Registration. Motor
vehicle tax is due within 30 calendar days after the date of the sale.
(C) A dealer is not required to collect motor vehicle
tax on the sale of a motor vehicle with a gross weight in excess of
11,000 pounds. If the dealer does not collect the motor vehicle tax,
the dealer must provide the purchaser with an Application for Texas
Title and/or Registration, signed by both the dealer and purchaser,
and all other documents required by the Texas Department of Motor
Vehicles to apply for title or register the motor vehicle. The purchaser
must remit motor vehicle tax to the county tax assessor-collector
within 30 Cont'd...