| (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 comptroller.texas.gov.
See §3.95 of this title (relating to Motor Vehicle Sales Tax
Resale Certificate; Sales for Resale).
(2) A seller may accept a properly completed Texas
Motor Vehicle Sales Tax Exemption Certificate--For Vehicles Taken
Out of State, Form 14-312, its electronic equivalent, or its successor,
promulgated by the comptroller, in lieu of collecting tax on motor
vehicles that will be removed from this state without being operated
other than to remove the motor vehicle from this state. The exemption
certificate is available at comptroller.texas.gov. See §3.90
of this title (relating to Motor Vehicles Purchased for Use Outside
of Texas).
(3) A purchaser claiming an exemption on the purchase
of a motor vehicle that qualifies for an exemption under Tax Code,
Chapter 152, Subchapter E, must indicate the exemption claimed on
the Application for Texas Title and/or Registration at the time of
purchase. The Application for Texas Title and/or Registration noting
the exemption claimed is submitted to the county tax assessor-collector
in lieu of tax.
(h) Unremitted tax paid to seller, transfer of certificate
of title.
(1) A county tax assessor-collector may accept an Application
for Texas Title and/or Registration without the payment of motor vehicle
tax from a purchaser who paid the motor vehicle tax to a dealer who
failed to remit the motor vehicle tax as described in subsection (c)
of this section.
(2) The purchaser must present acceptable evidence
of motor vehicle tax payment at the time an Application for Texas
Title and/or Registration is submitted to the county tax assessor-collector.
Acceptable evidence includes, but is not limited to, a sales contract
or bill of sale that identifies the dealer and the amount of motor
vehicle tax paid.
(3) The Application for Texas Title and/or Registration
must contain the dealer's Motor Vehicle Seller-Financed Sales Tax
Permit number (if applicable and available) and must indicate that
motor vehicle tax has been paid to the dealer and no additional motor
vehicle tax is due from the purchaser.
(4) The county tax assessor-collector shall notify
the comptroller of the dealer's failure to remit the motor vehicle
tax through the automated Registration-Title System (RTS) and include
the document indicating motor vehicle tax paid to the dealer in the
title application material.
(i) Prohibited advertising. A dealer may not directly
or indirectly advertise, hold out or state to a customer or the public
that he will assume, absorb or refund a part of the motor vehicle
tax imposed on the sale of a motor vehicle, or will not add tax to
the sales price.
|
| Source Note: The provisions of this §3.74 adopted to be effective December 9, 1998, 23 TexReg 12449; amended to be effective April 17, 2000, 25 TexReg 3289; amended to be effective April 2, 2002, 27 TexReg 2535; amended to be effective May 1, 2005, 30 TexReg 2401; amended to be effective May 18, 2017, 42 TexReg 2564; amended to be effective April 19, 2020, 45 TexReg 2420 |
