| (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%.
(B) A dealer who fails to timely file a seller-financed
sales tax report when due must pay an additional penalty of $50. The
penalty is due regardless of whether motor vehicle taxes are due for
the reporting period.
(e) General principles of seller-financed sales.
(1) The total downpayment is subject to motor vehicle
tax unless the payment is itemized to indicate nontaxable charges.
(2) If the finance agreement bears interest, it is
presumed that interest accrues and is paid by the purchaser on a straight
line basis.
(3) A transaction is considered paid in full when the
purchaser of a seller-financed motor vehicle trades-in that motor
vehicle to the dealer as consideration for the purchase of another
motor vehicle from the same dealer. The remainder of motor vehicle
tax owed on the initial sale must be reported on the first seller-financed
sales tax report due no later than the 20th day of the month following
the end of the reporting period in which the trade-in occurred.
(4) Motor vehicle tax remitted to the county tax assessor-collector
at the time the Application for Texas Title and/or Registration is
submitted is considered to satisfy the tax liability for that transaction
and no refund is available if the purchaser fails to satisfy their
total liability to the dealer making the seller-financed sale.
(5) If a dealer making a seller-financed sale fails
to submit the Application for Texas Title and/or Registration to apply
for title and registration within 60 days from the date of sale, the
dealer becomes liable for all unremitted motor vehicle tax based on
the total consideration for the motor vehicle. The dealer must remit
all unremitted motor vehicle tax on the first seller-financed sales
tax report due no later than the 20th day of the month following the
end of the reporting period in which the expiration of the 60 days
occurred.
(6) Unless excluded from acceleration of motor vehicle
tax by paragraph (7) of this subsection, if the dealer sells, factors,
assigns, or otherwise transfers the right to receive payments on a
seller-financed sale, the dealer is liable for all unremitted motor
vehicle tax due on the total consideration for the motor vehicle.
The dealer must report and remit any motor vehicle tax due on the
seller-financed sales tax report due no later than then 20th day of
the month following the end of the reporting period in which the transfer
of the right to receive payments occurred. The dealer may not take
a deduction in the amount of motor vehicle tax due, even if the dealer
sells the right to receive payments at a discount or grants the purchaser
of the notes a right of recourse.
(7) Motor vehicle tax remittance does not accelerate
if a dealer sells, factors, assigns, or otherwise transfers the right
to receive payments on a seller-financed sale to a person registered
with the comptroller's office as a related finance company or when
the dealer grants a security interest in a purchaser's account, but
retains custody and control of the account and the right to receive
payments in the absence of a default under the security agreement.
(8) If the dealer remits the motor vehicle tax due
in accordance with paragraph (6) of this subsection, and the motor
vehicle purchaser fails to make payments to the dealer's transferee
or assignee, then no bad debt deduction for any amount that the transferee
or assignee determines to be uncollectible on the purchaser's account
may be taken against any motor vehicle tax that the transferee or
assignee may owe.
(f) Registration of related finance companies.
(1) To register with the comptroller's office as a
related finance company, a person must complete a Texas Registration
for Motor Vehicle Related Finance Company.
(2) The registration remains in effect until canceled
by the registration holder or the comptroller.
(g) Resale certificates and exemption documentation.
(1) A seller may accept a Texas Motor Vehicle Resale
Certificate, Form 14-313, its electronic equivalent, or its successor,
promulgated by the comptroller only from a dealer as defined in this
section. A motor vehicle resale certificate for the sale of a new
motor vehicle purchased for resale may only be accepted from a franchised
motor vehicle dealer. To be valid, the motor vehicle resale certificate
must show the dealer license issued under Transportation Code, Chapter
503. The resale certificate is available at Cont'd... |
