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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

taxes

Motor Vehicle Tax Guide

Co-Owners and Co-Signers

Transfer to Co-Owner or Co-Maker

Transferring a title from one co-owner or co-maker to another is not a taxable transfer. Co-owners or co-makers have purchased a motor vehicle together. Both parties own the motor vehicle and, if there is a lien involved, both are jointly and separately liable for repayment of the entire loan. Taking over the sole responsibility of a lien does not make the transfer taxable, as each owner has been jointly and separately liable for the loan.

If the remaining owner gives any consideration to the former co-owner or co-maker, motor vehicle tax is due. Standard presumptive value (SPV) may apply.

Documentation should indicate that a co-owner or co-maker’s name is being removed from the loan.

Adding a New Co-Owner or Co-Maker

If a new co-owner is added to the title and gives any consideration to the existing owner, motor vehicle tax is due. SPV procedures may apply.

Transfer to Co-Signer

Motor vehicle tax is due when a co-signer takes possession of the motor vehicle. A co-signer who has agreed to guarantee the repayment of a loan on a motor vehicle does not become liable on the loan, unless the borrower defaults on the loan. If the borrower defaults on the loan, the co-signer has the right to take ownership of the motor vehicle and assume liability of the amount remaining due on the loan. Upon taking possession, the co-signer owes motor vehicle tax on the greater of the assumed liability or 80 percent of the motor vehicle’s SPV.


96-254
(09/2021)

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