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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) 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 calendar days after the date of sale.

    (D) If a dealer sells a commercial motor vehicle that is required to be equipped with a body or other necessary equipment before the motor vehicle can be registered under the Transportation Code, then the dealer must remit the motor vehicle tax within 30 calendar days after the date on which the motor vehicle becomes eligible for registration.

  (3) The dealer must retain copies of the documentation provided to the purchaser and all other records pertaining to the sale. The specific records each dealer is required to keep are listed in Tax Code, §152.063 (Records) and §152.0635 (Records of Certain Sellers). The dealer must keep the records for a minimum of four years from the date on which the record is made, and throughout any period in which any tax, penalty, or interest may be assessed, collected, or refunded by the comptroller or in which an administrative hearing or judicial proceeding is pending, unless the comptroller authorizes in writing a shorter retention period.

  (4) The motor vehicle tax due is 6.25% of the total consideration. Except as provided in paragraph (2)(C) of this subsection, the motor vehicle tax is a debt of the purchaser to the dealer until paid. Unpaid motor vehicle tax is recoverable by the dealer in the same manner as the total consideration for the motor vehicle, if unpaid, would be recoverable. The comptroller may proceed against either the dealer or purchaser, or both, until all applicable motor vehicle tax, penalty, and interest due has been paid.

(d) Remittance of motor vehicle tax on seller-financed sales as payments are received.

  (1) Each dealer making seller-financed sales who collects motor vehicle tax as the payments are received from the purchaser must remit the motor vehicle tax collected to the comptroller on or before the 20th day of the month following each reporting period. The dealer must file a consolidated report with the comptroller, together with the motor vehicle tax collected for seller-financed sales made at all locations owned by the dealer.

  (2) The dealer must file a consolidated seller-financed sales tax report for seller-financed sales made at all locations owned by the dealer, together with the motor vehicle tax collected. The report must be signed by the dealer or the dealer's authorized agent. The fact that the dealer does not receive the form or does not receive the correct form from the comptroller for the filing of the report does not relieve the dealer of the responsibility of filing a report and remitting motor vehicle tax. The report is available at comptroller.texas.gov.

  (3) A dealer making seller-financed sales may file reports and remit motor vehicle tax electronically, such as through Webfile at comptroller.texas.gov. Dealers who paid $100,000 or more in motor vehicle tax to the comptroller during the preceding fiscal year must remit motor vehicle tax electronically, as provided by Tax Code, §111.0625 (Electronic Transfer of Certain Payments). Dealers who paid $50,000 or more to the comptroller during the preceding fiscal year must file report data electronically, as provided by Tax Code, §111.0626 (Electronic Filing of Certain Reports). For more information on electronic filing and payments, see §3.9 of this title (relating to Electronic Filing of Returns and Reports; Electronic Transfer of Certain Payments by Certain Taxpayers).

  (4) A dealer completing a seller-financed sales tax report must allocate the motor vehicle tax paid on a motor vehicle to the county in which the dealer submitted the Application for Texas Title and/or Registration for the vehicle.

  (5) A dealer who remits less than $1,500 in motor vehicle tax per quarter may file reports quarterly. The quarterly reporting periods end on March 31st, June 30th, September 30th, and December 31st.

  (6) A dealer who remits $1,500 or more in motor vehicle tax per quarter must file monthly reports, except a dealer making seller-financed sales who chooses to prepay the motor vehicle tax, as provided in paragraph (7) of this subsection.

  (7) Discounts and prepayments of the motor vehicle tax.

    (A) Each dealer making seller-financed sales may claim a discount for timely filing a seller-financed sales tax report and remitting motor vehicle tax due as reimbursement for the expense of collecting and remitting the motor vehicle tax. The discount is equal to 0.5% of the amount of the motor vehicle tax due and may be claimed on the report for each reporting period. The discount is computed on the amount of motor vehicle tax timely reported and remitted for each reporting period.

    (B) A dealer making seller-financed sales who makes a timely prepayment of at least 90% of the total amount of motor vehicle tax currently due, or an amount equal to the actual motor vehicle tax liability due and paid for the same reporting period of the immediately preceding year, may retain an additional 1.25% of the amount of motor vehicle tax due.

      (i) The monthly prepayment must be made on or before the 15th day of the month for which the tax is due.

      (ii) The quarterly prepayment must be made on or before the 15th day of the second month of the quarter for which the tax is due.

      (iii) The dealer must file a seller-financed sales tax report showing the actual liability and remit any amount due in excess of the prepayment on or before the 20th day of the month following the quarter or month for which a prepayment was made.

      (iv) If there is an additional amount due when the seller-financed sales tax report is filed, the dealer may claim the 0.5% discount for timely filing, including on the additional amount of motor vehicle tax due, provided that both the seller-financed sales tax report and the additional amount of motor vehicle tax due are filed timely. If the prepayment exceeded the actual liability, the dealer will be mailed a notice of overpayment or a refund warrant.

      (v) A remittance that is less than 90% of the total amount of motor vehicle tax currently due, or less than the amount of actual motor vehicle tax due and paid for the same reporting period of the immediately preceding year, is not a valid prepayment and the 1.25% discount will not be allowed.

  (8) Penalties and interest.

    (A) If a dealer does not file a seller-financed sales tax report together with payment on or before the due date, the dealer forfeits all discounts and incurs a mandatory 5.0% penalty. After the first 30 days delinquency, an additional mandatory penalty of 5.0% is assessed against the dealer. After the first 60 days delinquency, interest begins to accrue at the prime rate, as published in the Wall Street Journal on the first business day of each calendar year, plus 1.0%.

Cont'd...

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