Motor Vehicle Sales,
Use and Rental Tax
Susan Combs, Texas Comptroller of Public Accounts
What is Considered a
“Motor Vehicle”?
A 6.25 percent
sales tax is imposed
on the retail sales
price (less trade-in
allowance) of motor
vehicles sold in
Texas.
Form 130-U must include:
“Motor vehicles” are self-propelled units
that transport property or persons on public
highways. The term also includes trailers,
semi-trailers, travel trailers and motorcycles
designed for highway use.
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Motor Vehicle Sales Tax Rate
Motor Vehicles Purchased
Out of State
A 6.25 percent sales tax is imposed on the
retail sales price (less trade-in allowance) of
motor vehicles sold in Texas. For privateparty sales, the sales tax may be based on
a minimum value
rather than the
actual sales price.
See the section
on Standard
Presumptive Value
(SPV) for more
information.
Who Collects
this Tax?
For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
AUGUST 2014
The county tax
assessor-collector
(TAC) collects the tax along with an
Application for Texas Title (Form 130-U).
The Texas Department of Motor Vehicles
(TxDMV) and the Comptroller’s office use
Form 130-U to document registration, title
information and the motor vehicle tax due.
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a description of the vehicle being
purchased;
the vehicle’s selling price;
a description of any trade-in; and
the signatures of the buyer and seller.
There is a 6.25 percent use tax on the selling
price (less trade-in allowance) of a motor
vehicle purchased outside of Texas and later
brought into the
state for use on
Texas highways by a
Texas resident. For
private-party sales,
the use tax may be
based on a minimum
value rather than
the actual sales
price. See the section
on SPV for more
information.
Use tax also applies to vehicles leased in
another state and registered in Texas by a
Texas resident.
With proof of payment, similar tax paid on
the vehicle to another state can be credited
against the tax due. To allow any credit, a
Motor Vehicle Sales, Use and Rental Tax
county TAC must view a receipt, invoice or
other document verifying the amount of tax
paid to another state, Puerto Rico or any U.S.
possession or territory in the owner’s name.
The credit is a dollar-for-dollar credit. States
may differ on the tax base used to calculate
the motor vehicle tax.
Standard Presumptive Value (SPV)
and Private Party Sales
SPV applies to private-party sales of all
types of used motor vehicles purchased
or brought into Texas. The used vehicle’s
SPV is available on the TxDMV’s website at
www.txdmv.gov/standard-presumptive-calculator.
The purchaser can
obtain a certified
appraisal from a
motor vehicle dealer
licensed for that
category of vehicle
or from a licensed
insurance adjuster.
The taxable value is the greater of the sales
price or 80 percent of SPV, as determined
by the TxDMV on the day the purchaser
presents Form 130-U to the county TAC.
The SPV calculation does not apply to these
transactions:
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For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
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sales by dealers;
sales of unrepaired salvage vehicles;
sales of abandoned vehicles;
vehicles sold through storage or
mechanic’s liens;
sales of vehicles eligible for specialty
plates described under Transportation
Code Section 504.501, including custom
vehicles, classic cars and trucks and
street rods (whether or not the vehicles
use those plates);
even trades of vehicles;
the gift of a motor vehicle; or
sales by governmental entities at auction.
A purchaser who will pay less than 80
percent of the vehicle’s SPV when purchasing
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a used vehicle may pay less tax if a certified
appraisal for the used vehicle reflects a lesser
value.
For example, a used vehicle may be worth
less if it has substantial body damage or
needs major mechanical work. The purchaser
must present the appraisal to the county
TAC using the Comptroller’s Texas Used
Motor Vehicle Certified Appraisal Form
(Form 14-128) within 30 calendar days from
the purchase date or within 30 calendar days
after bringing the vehicle into Texas.
The purchaser can obtain a certified
appraisal from a motor vehicle dealer
licensed for that category of vehicle or from a
licensed insurance adjuster.
For example, a purchaser can request a
used car dealer to appraise a used car, a
motorcycle dealer to appraise a motorcycle or
a trailer dealer to appraise a trailer.
Dealer fees for appraisals:
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cars and trucks – $100 to $300
motorcycles – $40 to $300
house trailers, travel trailers or motor
homes – $100 to $500
Licensed insurance adjusters set their own
fees for appraisals.
Purchasers should be aware that an appraisal
fee may offset any tax savings.
For example, tax on $1,600 of value is $100.
Therefore, a $100 appraisal must reduce the
vehicle’s SPV by more than $1,600 to save
money. A $300 appraisal fee would require
Motor Vehicle Sales, Use and Rental Tax
almost a $5,000 reduction in value to offset
the appraisal cost.
New Resident’s Tax
A new Texas resident must pay a $90 new
resident tax on a motor vehicle registered
in his or her own name in another state or
country and then brought into Texas.
The new resident tax also applies to vehicles
leased in another state or country and
registered in Texas by the new resident. The
$90 new resident tax cannot be offset by sales
or use tax paid to another state.
Texas
Emissions
Reduction
Plan Surcharge
(TERP)
In addition to the
motor vehicle sales
tax, use tax or new
resident tax, the
TERP surcharge
is imposed on
the sale or use of
a diesel-powered
motor vehicle with a registered gross weight
over 14,000 pounds.
The rate for model years 1996 and earlier is
2.5 percent of the total consideration paid for
the vehicle, and the rate for model years 1997
and later is 1 percent. The TERP surcharge
cannot be offset by sales or use tax paid to
another state.
Gifts
A $10 gift tax is due when a person receives
a motor vehicle as a gift from an eligible
donor. A “gift” is the transfer of a motor
vehicle between eligible parties for no
consideration.
“Consideration” includes anything given as
payment such as cash, the assumption of a
lien or other debt, payment for providing
services or labor or an exchange of real or
tangible personal property.
A motor vehicle received as a gift from an
eligible donor located out of state is subject
to the $10 gift tax when the motor vehicle is
brought into Texas.
To qualify for
the $10 gift tax,
a motor vehicle
must be received
from one of the
following eligible
parties:
A “gift” is the
transfer of a motor
vehicle between
eligible parties for
no consideration.
• spouse (separate
property only;
vehicles held
as community
property are not
subject to the tax);
•parent/stepparent;
•father/mother-in-law;
•grandparent/grandparent-in-law;
•grandchild/grandchild-in-law;
•child/stepchild;
•son/daughter-in-law;
•sibling/brother-in-law/sister-in-law;
•guardian;
• decedent’s estate (inherited/willed or
through an Affidavit of Heirship for a
Motor Vehicle);
For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
3
Motor Vehicle Sales, Use and Rental Tax
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The tax is due 30
calendar days from
the date of sale or,
if acquired out of
state, 30 calendar
days from the date
of first use in Texas.
nonprofit service organization qualifying
under Internal Revenue Code Section
501(c)(3), [gift tax applies when the
501(c)(3) organization is the donor or the
recipient]; or
certain revocable (living) trusts,
typically used in estate planning,
described in Texas Tax Code Section
152.025 (gift tax applies when the trust is
the donor or the recipient).
Either party can submit the Affidavit of
Motor Vehicle Gift Transfer (Form 14-317)
at the time of registration. This affidavit
must be filed in person with required
identification with the TAC of the county in
which the Application for Texas Title (Form
130-U) is submitted. See the affidavit for
further information. It must be accompanied
by any required application fee, supporting
documents, registration fee (if applicable)
and any motor vehicle tax due.
A motor vehicle transfer made without
consideration to an ineligible party is defined
as a sale and subject to SPV procedures. See
the section on SPV for more information.
Even Trades
For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
4
A $5 even trade tax is due on each vehicle
involved in an even trade. An “even trade” is
the exchange of a motor vehicle for another
motor vehicle in which no consideration,
other than the exchange of the vehicle, is
involved. More than one vehicle can be
exchanged for one or more other vehicles
if the net value to both parties remains the
same.
Due Date
The tax is due 30 calendar days from the
date of sale or, if acquired out of state, 30
calendar days from the date of first use in
Texas.
Active duty personnel of the U.S. military,
the reserves of the U.S. military, the Texas
National Guard or of another state’s National
Guard have 60 calendar days from the date
of sale or, if acquired out of state, from the
date of first use in Texas to transfer a used
motor vehicle with the county TAC.
Tax Exemptions
Agriculture Farm/Timber Machines and
Farm/Timber Trailers
Farmers, ranchers, agricultural producers
and timber operators who hold a valid
Texas Agriculture and Timber Exemption
Registration Number (Ag/Timber Number)
issued by the Comptroller’s office should
provide the Texas Motor Vehicle Tax
Exemption Certificate for Agricultural/
Timber (Form 14-319) to sellers or dealers of
motor vehicles when claiming an agricultural
or timber exemption from Texas motor
vehicle sales and use tax on the purchase
of farm machines, timber machines,
trailers and semi-trailers used primarily in
agricultural and timber operations. The Ag/
Timber Number must also be included on
Item 21 of the Application for Texas Title
(Form 130-U) filed with the county TAC.
In addition, farmers, ranchers, agricultural
producers and timber operators must
provide an Ag/Timber Number issued by
the Comptroller’s office to the county TAC
for the initial issuance of farm plates, for
Motor Vehicle Sales, Use and Rental Tax
farm plate renewals and when obtaining a
temporary excess weight permit. The Ag/
Timber Number presented must be issued in
the name of the person or DBA in which the
vehicle is, or will be, registered.
The primary owner or operator of the farm,
ranch or timber operation can obtain an Ag/
Timber Number that any person authorized
by the registrant can use to buy qualifying
items tax free. A qualified individual can
apply for their own Ag/Timber Number at
www.getreadytexas.org.
A “farm machine”
is a self-propelled
motor vehicle
specially adapted
for, and primarily
used in, the
production of
crops or rearing
of livestock. The
term includes
a self-propelled
motor vehicle
specially adapted
for distributing and applying plant-food
materials, agricultural chemicals or feed for
livestock.
A farm machine does not include a pick-up
truck or any self-propelled motor vehicle
specifically designed, or specially adapted, to
transport property other than the materials
being applied or for the sole purpose of
transporting or setting in place agricultural
products, plant-food materials, agricultural
chemicals or feed for livestock.
A “farm trailer” is a trailer or semi-trailer
designed and primarily used as a farm
or ranch vehicle. A farm trailer does not
include a motor vehicle designed for human
habitation, including, but not limited to,
any vehicle designed for sleeping, dressing,
lounging, restroom use or meal preparation,
even though the vehicle may also be used to
transport livestock or agricultural products.
The retail sale of a farm machine or a farm
trailer is exempt from the motor vehicle sales
and use tax if the farm machine or farm
trailer is used primarily (at least 80 percent
of the time):
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• on a farm or ranch
in the production
of food for human
consumption,
grass, feed for any
form of animal life
or other livestock,
or agricultural
products to be
sold in the regular
course of business;
or
by original producers in processing,
packing or marketing their own livestock
or agricultural products.
The use of a farm machine or farm trailer
to transport persons or property to or from
competitions, shows or rodeos, or for any
other similar use, is not an exempt use.
A “timber machine” is a self-propelled
motor vehicle specially adapted to perform
a specialized function for use primarily in
timber operations, such as land preparation,
A farm machine
does not include a
pick-up truck or any
self-propelled motor
vehicle specifically
designed, or
specially adapted, to
transport property
other than the
materials being
applied or for the
sole purpose of
transporting or
setting in place
agricultural
products, plantfood materials,
agricultural
chemicals or feed for
livestock.
For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
5
Motor Vehicle Sales, Use and Rental Tax
planting, maintenance or harvesting of
commercial timber that will be sold in the
regular course of business.
A timber machine does not include any
self-propelled motor vehicle specifically
designed or adapted for the primary use of
transporting timber or timber products,
including a self-propelled motor vehicle
designed to transport cargo and adapted
with a cargo-loading device.
A qualified church
or religious society is
exempt from paying
motor vehicle sales
tax and rental tax,
if the motor vehicle
is designed to carry
more than six
passengers and used
primarily to provide
transportation to
and from church or
religious services or
meetings.
For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
6
The term also does not include field service
vehicles, such as those used to fuel or
maintain other vehicles or crew vehicles.
A “timber trailer” is a trailer designed for
and used primarily in a timber operation.
The retail sale of a timber machine or timber
trailer is exempt from motor vehicle sales
and use tax if the timber machine or timber
trailer is used primarily (at least 80 percent
of the time) in timber operations.
Child Care Facilities
Certain child care facilities licensed under
Human Resources Code Chapter 42 that
provide 24-hour residential care are exempt
from motor vehicle sales tax.
The facility must be licensed to provide care
in a single residential group both to children
who do not require specialized services or
treatment and children who are emotionally
disturbed.
To qualify, the vehicle must be used
primarily (at least 80 percent of the time) in
transporting the children who reside in the
facility.
Motor vehicle purchases by day care
centers, group day care centers, registered
family homes or those residential childcare
facilities that do not provide 24-hour care
are not exempt from motor vehicle tax. The
exemption does not apply to a motor vehicle
purchased by maternity homes that receive a
Texas Department of Family and Protective
Services (DFPS) license under Health and
Safety Code Chapter 249.
The exemption does not apply to motor
vehicles purchased by facilities that hold
a verification certificate from a licensed
DFPS child-placing agency and not a license
directly from DFPS. These facility types
include agency foster homes, agency foster
group homes, Child Protective Services
(CPS) foster homes, CPS foster group
homes and CPS adoptive homes. A childplacing agency that only places children in
its verified facilities does not qualify, since
the agency is not directly providing the
childcare.
Church or Religious Society
A qualified church or religious society is
exempt from paying motor vehicle sales
tax and rental tax, if the motor vehicle is
designed to carry more than six passengers
and used primarily to provide transportation
to and from church or religious services or
meetings.
A qualified church or religious society is
an organized group of people regularly
associating for the sole purpose of holding,
conducting and sponsoring religious worship
according to the rites of the group.
Motor Vehicle Sales, Use and Rental Tax
“Used primarily” means the use of the vehicle
for transportation to and from the church,
religious services or religious meetings and
not for other religious or charitable purposes
at least 80 percent of the time.
II or stricter Phase II emission standards
established by that board and is:
For example, a church’s purchase of a van to
deliver medical services and care to needy
people as part of the church’s outreach
program would not be exempt if the van
was used more than 20 percent of the time
for these purposes and not primarily to
transport persons
to religious
services or
religious meetings.
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Tax is due on a
vehicle purchased
for the personal
use of a minister.
Driver Training
No motor vehicle
tax is due on a
vehicle owned by
and titled to a dealership if loaned without
charge to a public school for exclusive use in
an approved standard driver-training course.
The public school applies for exempt license
plates at the time of vehicle registration.
Hydrogen-Powered Motor Vehicles
Ultra low-emission vehicles that are
hydrogen-power capable with at least 45
miles per gallon or are fully hydrogenpowered are exempt from Texas motor
vehicle sales or use tax. Vehicles must
meet Phase II standards established by the
California Air Resources Board as of Sept.
1, 2007, for an ultra-low-emission vehicle
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hydrogen power capable and has a fuel
economy rating of at least 45 miles per
gallon; or
fully hydrogen-powered.
Interstate Motor Vehicles
The sale of a motor vehicle (truck, trucktractor, trailer or semi-trailer) that is to be
regularly operated in Texas and another state
and for which
registration fees
qualify to be
apportioned under
the International
Registration Plan
(IRP) is exempt
from Texas
motor vehicle
sales and use tax
as an interstate
motor vehicle.
Trailers pulled
by apportioned
tractors and operated interstate on token
plates also qualify for the exemption.
For the purposes of motor vehicle tax, an
“interstate motor vehicle” includes a truck,
truck-tractor or any other motor vehicle with
a gross registered weight in excess of 26,000
pounds either separately or in combination
with a trailer or semi-trailer, that is regularly
operated in Texas and some other state or
foreign country, and for which registration
fees could be apportioned if the motor
vehicle were registered in a state or province
of a country that is a member of the IRP.
Ultra low-emission
vehicles that are
hydrogen-power
capable with at
least 45 miles per
gallon or are fully
hydrogen-powered
are exempt from
Texas motor vehicle
sales or use tax.
For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
7
Motor Vehicle Sales, Use and Rental Tax
Interstate-operated charter buses are exempt
from motor vehicle tax, regardless of the
type of registration.
Qualifying modifications include a
wheelchair lift, hoist and hand-controlled
accelerator and brake.
Units rented by contract for 180 days or less
are subject to motor vehicle rental tax.
Running boards, grab bars, steering wheel
knobs or other standard factory options,
such as an automatic transmission or power
steering, are not qualifying modifications.
Motor Vehicles Transported Out of State
A motor vehicle purchased in Texas for use
exclusively outside Texas is exempt from
motor vehicle sales tax.
A vehicle specifically
modified to enable
an orthopedically
disabled driver to
operate the vehicle,
or an orthopedically
disabled passenger
to be transported
in the vehicle, is
exempt from motor
vehicle tax.
To be exempt, the purchaser must not
use the motor vehicle in Texas, except for
transportation directly out of state, and must
not title or register the motor vehicle in Texas.
The purchaser should issue the seller a
Texas Motor Vehicle Sales Tax Exemption
Certificate – For Motor Vehicles Taken Out of
State (Form 14-312) at the time of sale.
Nonprofit Organizations
Motor vehicle sales tax exemptions are very
limited. A nonprofit or an organization
funded by state or federal government is not
automatically exempt from motor vehicle
tax. This includes organizations that are
exempt from federal tax or other Texas taxes.
To qualify for exemption from motor vehicle
tax, an organization must be either a public
agency or exempt by a specific statute.
For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
8
Orthopedically Disabled
A vehicle specifically modified to enable an
orthopedically disabled driver to operate
the vehicle, or an orthopedically disabled
passenger to be transported in the vehicle, is
exempt from motor vehicle tax.
To qualify for the exemption, the purchaser
must be orthopedically disabled at the time
of purchase and provide the selling dealer
or county tax assessor-collector a Texas
Motor Vehicle Orthopedically Handicapped
Exemption Certificate (Form 14-318). The
purchaser must have the vehicle modified
before the second anniversary of the date of
purchase.
Public Agencies
Motor vehicle sales or rental tax is not due
on a vehicle purchased, leased or rented by a
public agency
A “public agency” includes a federal, state,
county or city agency and its subdivisions
as defined by Texas Tax Code Section
152.001(7).
Federal law also provides motor vehicle
tax exemptions for other organizations,
including certain Indian tribes, the
American Red Cross, Boy Scouts, Girl
Scouts, Camp Fire Girls, Boys Clubs and
Girls Clubs.
Except for the federal government and its
instrumentalities and agencies, vehicles
belonging to a public agency must display
exempt license plate to qualify for exemption
from motor vehicle sales or rental tax. Motor
Motor Vehicle Sales, Use and Rental Tax
vehicle tax is due on motor vehicles operated
with standard license plates.
Nonprofit service organizations do not
qualify as public agencies.
Volunteer Fire Departments and Volunteer
Emergency Medical Services
Fire trucks, ambulances and other motor
vehicles used exclusively for fire-fighting
purposes or for emergency medical services
are exempt from motor vehicle tax when
rented to or purchased by:
•
volunteer fire
departments;
•nonprofit
emergency
medical
service
providers that
are exempt
as 501(c)(3)
organizations;
or
• emergency medical service providers
to which Transportation Code Section
502.456 applies.
The exemption also applies to an emergency
medical services chief ’s or supervisor’s
vehicle, if used exclusively as an emergency
services vehicle.
A “volunteer fire department” includes
any company, department or association
organized to answer fire alarms,
extinguish fires and provide emergency
medical services. Members of a volunteer
fire department receive no or nominal
compensation for their services.
An “emergency medical service” provides
emergency medical treatment, rescue
service and transportation of the sick and
injured. The emergency medical service
can be a nonprofit organization, or it can
be created and operated by a county or
municipality, or a combination of counties
and municipalities.
A for-profit private ambulance or medical
transport service does not qualify as an
emergency medical service for the purpose of
the motor vehicle tax exemption.
Motor Vehicle
Rentals and
Leased
Vehicles
Motor Vehicle
Rentals
A motor vehicle
rental occurs when
the owner offers
exclusive use of the
vehicle to another for consideration.
For rental contracts
of 30 days or less,
the tax rate is 10
percent of the gross
rental receipts.
Rentals are for 180 days or less under a
single contract, unless it is a re-rental (a
rental to another rental company that will
rent to a retail customer), or the owner is a
manufacturer, in which case the rental can
be for any period of time.
Rental Tax Rate
For rental contracts of 30 days or less, the tax
rate is 10 percent of the gross rental receipts.
Additionally, some cities and counties
have created sports and community venue
authorities/districts that can impose up to
an additional 5 percent tax on short-term
rentals.
For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
9
Motor Vehicle Sales, Use and Rental Tax
For contracts of 31 to 180 days, the tax rate is
6.25 percent of the gross rental receipts.
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Rentals over 180 days are considered a lease
and no tax is due. See the section in this
publication on “Leased Vehicles.”
•
A motor vehicle rental permit holder who is
a manufacturer, a licensed Texas automobile
dealer or the title owner of at least five
motor vehicles that will be rented within a
12-month period can register a rental vehicle
tax free.
A “lease” is an
agreement by an
owner (lessor) to
give exclusive use
of a motor vehicle
to a lessee for
consideration for a
specified period of
more than 180 days.
The rental permit holder establishes a
minimum tax liability equal to the sales tax
due if the vehicle had not been registered
tax free. These permit holders must collect
and remit an amount at least equal to the
minimum tax liability. If the minimum tax
liability is not met, the title owner owes the
balance between the tax collected and the
minimum tax liability.
All other rental permit holders must pay
the 6.25 percent motor vehicle sales tax at
the time of registration. From the rental tax
collected, those permit holders can reimburse
themselves the amount of sales tax they paid
to the county at the time of registration.
For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
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All rental permit holders must pay the TERP
fee discussed earlier in this publication at the
time of initial registration.
Exempt Rentals
There is no gross rental receipts tax imposed
if the vehicle is rented:
•
•
to a public agency;
for re-rental (a rental to another rental
company);
to a church or religious society, if the
vehicle is designed to carry more than
six passengers and at least 80 percent
of its use is transportation to and from
church services or religious meetings;
as a self-propelled motor vehicle
converted into a farm or timber
machine, or a trailer or semi-trailer
rented for use on a farm, ranch or in
timber operations; or
to certain child care facilities licensed
under Human Resources Code Chapter
42 that are licensed to provide 24-hour
residential care in a single residential
group both to children who do not
require specialized services or treatment
and children who are emotionally
disturbed, if the vehicle is used primarily
in transporting the children who reside
in the facility.
To claim the exemption, the renter must
issue a Motor Vehicle Rental Tax Exemption
Certificate, (Form 14-305/Back) at the time
of rental. For more information on motor
vehicle rental tax, see the Motor Vehicle
Rental Tax Guidebook (Pub. 96-143).
Leased Vehicles
A “lease” is an agreement by an owner
(lessor) to give exclusive use of a motor
vehicle to a lessee for consideration for a
specified period of more than 180 days.
Under the terms of an operating lease
agreement, a lessor remains the title owner
of a motor vehicle and a lessee has no
ownership rights.
Motor Vehicle Sales, Use and Rental Tax
Texas does not tax lease payments. The
lessor pays 6.25 percent motor vehicle sales
tax when the vehicle is purchased and titled
in Texas. The taxable value of private-party
purchases of leased (used) motor vehicles
may be based on 80 percent of the SPV.
A new resident who leases a motor vehicle
out of state and brings it into Texas for use
on public highways owes a $90 new resident
use tax, not the 6.25 percent use tax. The $90
new resident tax cannot be offset by sales or
use tax paid to another state.
If the lessee exercises an option to purchase
the motor vehicle, a new taxable sale (second
transaction) occurs. The tax is based on the
amount (option) paid at the conclusion of
the lease. SPV may apply if the lessor is not a
dealer. The lessee
receives no credit
for tax reimbursed
to the lessor on
the lessor’s initial
purchase of the
vehicle.
State and Local Sales and Use Tax
When a motor
vehicle is leased in
another state by
a Texas resident
or by a person
domiciled or doing
business in Texas, and the person brings the
vehicle into Texas, the lessee (as the operator)
owes motor vehicle use tax. Use tax is also
due when a Texas resident assumes a lease
on an out-of-state vehicle and brings it into
Texas.
The use tax is based on the price the lessor
paid for the motor vehicle. SPV may apply
if the lessor is not a dealer. Credit is given
for any tax the lessor or the lessee paid
to another state, Puerto Rico or any U.S.
possession or territory. Either the lessor or
the lessee must document tax payment.
Motor Vehicle Accessories
Accessories purchased to be added to a
motor vehicle after the purchase of the motor
vehicle are subject
to the 6.25 percent
state sales and use
tax, plus applicable
local taxes.
Accessories include
items such as
refrigeration units,
side-view mirrors
and winches.
If the lessee
exercises an option
to purchase the
motor vehicle,
a new taxable
sale (second
transaction)
occurs.
Charges for
installation labor
by the seller of the accessories are also
subject to sales tax.
Movable Specialized Equipment
Equipment designed and built to perform a
specialized function that does not include
transporting property or moving persons
other than the driver is subject to the
6.25 percent state sales and use tax, plus
applicable local taxes.
Motorized cranes, bulldozers and air
compressors are examples of movable
specialized equipment.
For more information,
visit our website
www.window.state.tx.us.
Receive tax help at
www.cpa.state.tx.us/
taxhelp.
11
Motor Vehicle Sales, Use and Rental Tax
Need More Assistance?
If you have any questions, please contact us by email at
www.cpa.state.tx.us/taxhelp/, or call 1-800-252-1382.
Disclaimer
This publication is intended as a general guide and not as a
comprehensive resource on the subjects covered. It is not a
substitute for legal advice.
We’re Here To Help! Call Toll Free!
If you have questions or need information on a specific tax, please call our toll-free numbers:
1-800-252-5555
911 Emergency Service/
Equalization Surcharge
Automotive Oil Fee
Battery Fee
Boat and Boat Motor
Sales Tax
Customs Broker
Fireworks Tax
Mixed Beverage Tax
Off-Road, Heavy-Duty Diesel
Equipment Surcharge
Oyster Fee
Sales and Use Taxes
1-800-531-5441
Cement Tax
Inheritance Tax
Local Revenue
Miscellaneous Gross Receipts
Taxes
Oil Well Servicing Tax
Sulphur Tax
1-800-531-5441, ext. 3-3630
WebFile Help
1-800-252-1381
Bank Franchise
Franchise Tax
1-800-252-7875
Spanish
1-800-531-1441
Fax on Demand (Most frequently
requested Sales and Franchise
tax forms)
1-800-252-1382
Clean Vehicle Incentive Program
Manufactured Housing Tax
Motor Vehicle Sales Surcharge,
Rental and Seller Financed Sales
Tax
Motor Vehicle Registration Surcharge
1-800-252-1383
Fuels Tax
IFTA
LG Decals
Petroleum Products Delivery Fee
School Fund Benefit Fee
1-800-252-1385
Coin-Operated Machines Tax
Hotel Occupancy Tax
Texas Comptroller of Public Accounts
Publication #96-116
Revised August 2014
1-800-252-1386
Certificates of Account Status/Good
Standing
Officer and Director Information
For additional copies write:
Texas Comptroller of Public Accounts
111 East 17th Street
Austin, Texas 78711-1440
1-800-862-2260
Cigarette and Tobacco
For more information, visit our website
www.window.state.tx.us
1-888-4-FILING (1-888-434-5464)
TELEFILE: To File by Phone
Receive tax help at
www.cpa.state.tx.us/taxhelp
1-800-252-1389
GETPUB: To Order Forms and
Publications
1-800-654-FIND (1-800-654-3463)
Treasury Find
1-800-252-1384
Coastal Protection
Crude Oil Production Tax
Natural Gas Production Tax
1-800-321-2274
Unclaimed Property Claimants
Unclaimed Property Holders
Unclaimed Property Name Searches
512-463-3120 in Austin
1-800-252-1387
Insurance Tax
1-877-44RATE4 (1-877-447-2834)
Interest Rate
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