| (a) Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Off-road, heavy-duty diesel equipment--Diesel-powered
equipment of 50 horsepower or greater, other than motor vehicles and
equipment used directly in oil and gas exploration and production
at an oil or gas well site. See §3.96 of this title (relating
to Imposition and Collection of a Surcharge on Certain Diesel Powered
Motor Vehicles) for information about the imposition of the surcharge
on motor vehicles. Off-road, heavy-duty diesel equipment includes
accessories and attachments sold with the equipment. Off-road, heavy-duty
diesel equipment includes, but is not limited to, the following diesel-powered
equipment:
(A) backhoes;
(B) bore equipment and drilling rigs, except drilling
rigs used to drill oil and gas wells;
(C) bulldozers;
(D) compactors (plate compactors, etc.);
(E) cranes;
(F) crushing and processing equipment (rock and gravel
crushers, etc.);
(G) dumpsters and tenders;
(H) excavators;
(I) forklifts (rough terrain forklifts, etc.);
(J) graders;
(K) light plants (generators) and signal boards;
(L) loaders;
(M) mining equipment;
(N) mixers (cement mixers, mortar mixers, etc.);
(O) off-highway vehicles and other moveable specialized
equipment (equipment, such as a motorized crane, that does not meet
the definition of a motor vehicle because it is designed to perform
a specialized function rather than designed to transport property
or persons other than the driver);
(P) paving equipment (asphalt pavers, concrete pavers,
etc.);
(Q) rammers and tampers;
(R) rollers;
(S) saws (concrete saws, industrial saws, etc.);
(T) scrapers;
(U) surfacing equipment;
(V) tractors; and
(W) trenchers.
(2) Surcharge--A fee imposed on the sale, lease, or
rental in Texas of new or used off-road, heavy-duty diesel equipment
and on the storage, use, or other consumption of such equipment subject
to use tax as provided for in §3.346 of this title (relating
to Use Tax). This surcharge is in addition to state and local sales
and use taxes that are due on the equipment and is for the benefit
of the Texas Emissions Reduction Fund, which is administered by the
Texas Commission on Environmental Quality.
(3) Sales price--The total amount a purchaser pays
a seller for the purchase, lease, or rental of off-road, heavy-duty
diesel equipment as set out in Tax Code, §151.007. The sales
price includes charges for accessories, transportation, installation,
services, and other expenses that are connected to the sale.
(b) Imposition of Surcharge.
(1) A surcharge is due on the sales price of off-road,
heavy-duty diesel equipment sold in Texas. If the purchaser takes
possession of or title to the equipment on or after September 1, 2015,
the surcharge is 1.5% of the sales price. If the purchaser took possession
of or title to the equipment on or after July 1, 2003, and before
September 1, 2015, the surcharge is 2.0% of the sales price.
(2) A surcharge is due on the sales price, excluding
separately stated interest charges, of off-road, heavy-duty diesel
equipment leased under a financing lease, as defined in §3.294
of this title (relating to Rental and Lease of Tangible Personal Property).
If the lessee takes possession of the equipment on or after September
1, 2015, the surcharge is 1.5% of the sales price. If the lessee took
possession of the equipment on or after July 1, 2003, and before September
1, 2015, the surcharge is 2.0% of the sales price.
(3) A surcharge is due on the lease payments for off-road,
heavy-duty diesel equipment that is leased under an operating lease,
as defined in §3.294 of this title. If the lessee takes possession
of the equipment on or after September 1, 2015, the surcharge is 1.5%
of the lease payments. If the lessee took possession of the equipment
on or after July 1, 2003, and before September 1, 2015, the surcharge
is 2.0% of the lease payments.
(4) A surcharge is due on the sales price of off-road,
heavy-duty diesel equipment purchased, leased, or rented out of state
and brought into Texas for use. If the purchaser brings the equipment
into Texas for use on or after September 1, 2015, the surcharge is
1.5% of the sales price. If the purchaser brought the equipment into
Texas for use on or after July 1, 2003, and before September 1, 2015,
the surcharge is 2.0% of the sales price. See §3.346 of this
title.
(5) A 1.0% surcharge is due on off-road, heavy-duty
diesel construction equipment sold, leased, or rented if the purchaser
took possession of or title to the equipment on or after August 31,
2001 and before July 1, 2003. No surcharge is due on equipment sold,
leased, or rented during this time period if the equipment is subject
to use tax or is used in non-construction activities.
(c) Collection of surcharge. A seller must collect
the surcharge from the purchaser on the sales price of each sale,
lease, or rental in Texas of off-road, heavy-duty diesel equipment
that is not exempt from sales tax. The surcharge is collected at the
same time and in the same manner as sales or use tax. See §3.286
of this title (relating to Seller's and Purchaser's Responsibilities)
for information on the collection and remittance of sales or use tax.
The surcharge is collected in addition to state and local sales or
use taxes but is not collected on the amount of the sales or use tax.
(d) Exemptions. No surcharge is collected on the sale,
lease, or rental of off-road, heavy-duty diesel equipment that is
exempt from sales and use tax. A seller who accepts a valid and properly
completed resale or exemption certificate, direct payment exemption
certificate, or other acceptable proof of exemption from sales and
use tax is not required to collect the surcharge. For example, a seller
may accept an exemption certificate in lieu of collecting sales tax
and the surcharge from a farmer who purchases a bulldozer to be used
exclusively in the construction or maintenance of roads and water
facilities on a farm that produces agricultural products that are
sold in the regular course of business.
(e) Reports and payments.
(1) A seller or purchaser with a surcharge account,
including a direct payment holder, must report and pay the surcharge
in the same manner as sales or use tax, but separate reports and payments
for the surcharge are required.
(A) A seller's or purchaser's reporting period (i.e.,
monthly, quarterly, or yearly) and due date for the surcharge are
determined by the amount of surcharge that the seller collects or
purchaser owes. See §3.286 of this title.
(B) A purchaser who does not hold a surcharge account
must report and pay the surcharge by the 20th day of the month following
the month in which the purchaser acquired off-road, heavy-duty diesel
powered equipment on which the seller did not collect the surcharge.
(2) A seller or purchaser must report and pay the surcharge
to the comptroller on forms prescribed by the comptroller for the
surcharge. A seller or purchaser is not relieved of the responsibility
for filing a surcharge report and paying the surcharge by the due
date because the seller or purchaser fails to receive the correct
form from the comptroller.
(3) The penalties and interest imposed for failure
to timely file and pay the surcharge are the same as those imposed
for failure to timely file and pay sales or use tax. Likewise, the
0.5% discount for timely filing and payment is applicable to surcharge
reports and payments. No prepayment discount will be paid a seller
or purchaser for prepayment of the surcharges.
(f) Expiration. The surcharge expires on the last day
of the state fiscal biennium during which the Texas Commission on
Environmental Quality publishes in the Texas
Register the notice required by Health and Safety Code, §382.037.
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