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TITLE 34PUBLIC FINANCE
PART 1COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 3TAX ADMINISTRATION
SUBCHAPTER FMOTOR VEHICLE SALES TAX
RULE §3.74Seller Responsibility

(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 time.

  (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, who:

    (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 warranty expires.

  (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); and

    (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; or

    (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; or

    (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 Attempts).

  (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

    (C) rental.

  (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 sold;

      (iv) separately stated finance or interest charges on credit extended under a conditional sale or other deferred payment contract;

      (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; or

      (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...

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