Motor Vehicle - Texas Emissions Reduction Plan (TERP) Surcharge

Who is responsible for this tax?

Purchasers of diesel-powered, on-road motor vehicles with a gross vehicle registered weight exceeding 14,000 pounds must pay the surcharge either to the selling dealer or directly to the local county tax assessor-collector along with the payment of the regular motor vehicle sales or use tax. This applies to both new and used vehicles and to motor vehicles purchased inside or outside Texas.

Rates

1 percent of total consideration paid for the vehicle (model years 1997 and later).

2.5 percent of total consideration paid for the vehicle (model years prior to 1997).

Due Date

Buyers who do not pay the surcharge to the selling dealer must pay it to the local county tax assessor-collector within 30 calendar days of either purchasing the vehicle in Texas or bringing the unit into Texas from elsewhere.

Selling dealers who collected the surcharge, other than dealers who financed the sale, must remit the surcharge to the county tax assessor-collector within 30 calendar days of the sale along with the regular motor vehicle sales tax. This is completed at the time of titling and registration.

Selling dealers who finance their own sales (seller-financed sales) must report the surcharge on their Form 14-117, Texas Motor Vehicle Seller-Finance Sales Tax and/or Surcharge Report (PDF).

County tax-assessor collectors remit to the Comptroller on or before the 10th of each month following the end of the reporting period (for example, April 10 for March activity).

Penalties and Interest

Penalties

• If tax is paid 1-30 days after the due date, a 5 percent penalty is assessed.
• If tax is paid over 30 days after the due date, a 10 percent penalty is assessed.

Interest

• Past due taxes are charged interest beginning 61 days after the due date.
• To calculate interest on past due taxes, visit Interest Owed and Earned.

Reporting and Payment Requirements

Select the amount of taxes you paid in the preceding state fiscal year (Sept. 1 – Aug. 31) to find the reporting and payment methods to use.

Less than $500,000

Select one of these reporting methods:

• Webfile
• Tax Forms

Select one of these payment methods:

• Web Electronic Funds Transfer (EFT) or credit card via Webfile (American Express, Discover, Mastercard and Visa)
• TEXNET
• Check

$500,000 or more

Select one of these reporting methods:

• Webfile
• Tax Forms

TEXNET is the only acceptable payment method.

Additional Resources

• Motor Vehicle Taxpayer Status Search
• All Motor Vehicle Taxes