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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

Glossary of Terms


A

Accessory

Nonessential tangible personal property attached to a motor vehicle for the convenience or comfort of the operator or passengers, or to assist or aid in the transportation, loading, or unloading of tangible personal property. Examples include a car radio, air conditioner, refrigerator on a meat van, or concrete mixer.

Agriculture and Timber Exemption Registration Number (Ag/Timber Number)

The 11-digit registration number issued by the Comptroller’s office to farmers, ranchers, agricultural producers and timber operations.

Listed also in this Glossary as:
Texas Agricultural and Timber Exemption Registration Number.

Apportioned License Plate

A license plate issued in lieu of a truck, motor bus, or combination license plate to a motor carrier in this state who proportionally registers a vehicle owned or leased by the carrier in one or more other states. See also International Registration Plan (IRP) in this Glossary.

Application for Texas Title and/or Registration

Form 130-U, its electronic equivalent, or a successor form, promulgated jointly by the Comptroller’s office and the Texas Department of Motor Vehicles (TxDMV), used to apply for a motor vehicle title and registration and to pay any motor vehicle sales or use tax due. The application for Texas Title and/or Registration is available at Comptroller.Texas.Gov.

Appraisal

A written statement independently and impartially prepared by a qualified appraiser employing generally accepted appraisal methods and techniques, in a narrative format or on a form chosen by the appraiser, setting forth an opinion as to the current fair market value of an adequately described motor vehicle and any accessories or equipment that may be affixed to the motor vehicle. The appraisal must be sufficiently descriptive to enable a third party to readily ascertain the estimated value of the motor vehicle and the rationale for that estimate.

Appraised Value

The taxable value of a used motor vehicle for the purpose of calculating motor vehicle sales tax due on the date of a certified appraisal.

Assigned Title

A title of a motor vehicle on which the previous owner (or a person acting under power of attorney) signed the back of a title and indicated the name of the person to whom the motor vehicle was being transferred.

Listed also in this Glossary as:
Title, Assigned.

B

Book Value

The value, based on Generally Accepted Accounting Principles (GAAP), of a motor vehicle on the owner's books and records at the time the owner transfers the motor vehicle.

Bunkhouse

A house trailer designed to be used as sleeping accommodations for multiple persons, such as a work crew, but not as a single-family residence.

Business Entity or Legal Entity

A form of business with distinct and independent existence, that is recognized by law and includes, but is not limited to, a sole proprietorship, partnership, limited partnership (LP), limited liability partnership (LLP), corporation or limited liability company (LLC) doing business in Texas.

Listed also in this Glossary as:
Legal Entity.

C

Cab Card

A registration receipt that describes a vehicle and reflects the weight in each jurisdiction in which the vehicle is registered for operation. See also International Registration Plan (IRP) in this Glossary.

Certificate of Title

A printed record of title for a motor vehicle under Transportation Code Section 501.021, Title for Motor Vehicle, by the Texas Department of Motor Vehicles (TxDMV). The blue copy is the original and becomes the “owner’s” copy when the motor vehicle is paid off.

Listed also in this Glossary as:
Title.

Child

The biological son or daughter of a parent or parents; the son or daughter of a parent or parents by virtue of legal adoption; or the son or daughter of a parent who, under Family Code, Chapter 160, Uniform Parentage Act, or a comparable law of another state or jurisdiction is presumed to be a biological parent, has executed an acknowledgment of parenthood, or has been adjudicated to be a biological parent by court decree. The term includes a child in the care of a foster parent and the spouse of a child.

Church or Religious Society

A regularly organized group of people associating for the sole purpose of holding, conducting and sponsoring, according to the rights of the sect, religious worship. An organization supporting and encouraging religion as an incidental purpose or an organization with the general purpose of furthering religious work or instilling its membership with a religious understanding is not sufficient to qualify such an entity as a church or religious society.

Co-Owner or Co-Maker

A party to the ownership of a motor vehicle. When a loan is undertaken, all parties are jointly and severally liable for its payment.

Co-Signer

A party that has agreed to guarantee the repayment of a loan but does not have direct ownership rights.

Combination License Plate

A license plate issued for a truck or truck-tractor that is used or intended to be used in combination with a semi-trailer that has a gross weight of more than 6,000 pounds.

Community Property

All property, both real and personal other than separate property, acquired by either spouse during the marriage. All property acquired during a marriage by either spouse is presumed to be community property.

Comptroller

Texas Comptroller of Public Accounts.

Conditional Sale

A sales agreement under which the lessor (seller) retains title until the lessee (purchaser) has paid for the motor vehicle, at which time the conditional sale has been fulfilled and the title passes to the lessee. This is also known as a lease/purchase agreement.

Listed also in this Glossary as:
Lease/Purchase Agreement.

Consideration

The amount paid or to be paid for a motor vehicle, valued in money, as prescribed in Tax Code Section 152.002, or anything of monetary value including but not limited to cash or the equivalent, a book entry reflecting cash received or paid, the forgiveness or assumption of debt, book entries reflecting accounts receivable or accounts payable for an item, or issuance of stock when stock ownership in the subsidiary is less than 100%. Consideration does not include any amount equal to less than 10% of a motor vehicles current appraised fair market value at the time of transfer.

Consumer Credit Commission

Also called Office of Consumer Credit Commissioner (OCCC); the state agency that licenses companies that finance motor vehicle sales in Texas. Motor vehicle dealers that provide financing themselves, dealers that arrange financing with lenders for their customers and finance companies that provide financing to dealers’ customers must hold a license with the OCCC.

Corporation

A distinct legal entity formed by filing a certificate of formation with the Texas Secretary of State, or similar documents under the laws of another state or jurisdiction, that is separate from its shareholders, officers, and directors; is the sole owner of all corporate property; and must contain the word "corporation," "incorporated," "limited" or an abbreviation thereof in the corporate name. The term includes a for-profit corporation, nonprofit corporation, professional corporation, an S corporation for federal income tax purposes, limited liability company, professional limited liability company, a bank, state limited banking association, and savings and loan association. The term does not include a municipal corporation.

Listed also in this Glossary as:
Limited Liability Company (LLC).

CTAC

County tax assessor-collector, sometimes referred to as county TAC.

D

Date of Sale

The day the purchaser takes possession of a motor vehicle unless otherwise specified by written agreement.

Listed also in this Glossary as:
Purchase Date
Sale Date
.

Dealer

A person who holds a general distinguishing number or operates under similar regulatory requirements of another state or jurisdiction. The term includes a franchised motor vehicle dealer, a nonfranchised motor vehicle dealer, an independent mobility motor vehicle dealer, and a wholesale motor vehicle dealer. The term does not include a salvage vehicle dealer licensed under Occupations Code, Chapter 2302, Salvage Vehicle Dealers.

Dealer, Franchised

A person who holds a franchised motor vehicle license issued under Occupations Code, Chapter 2301, Sale or Lease of Motor Vehicles; and is engaged in the business of buying, selling, or exchanging new motor vehicles at an established and permanent place of business under a franchise agreement with a manufacturer or distributor; or is licensed under similar regulatory requirements of another state or jurisdiction.

Listed also in this Glossary as:
Franchised Motor Vehicle Dealer.

Dealer, Nonfranchised

A person who holds an independent motor vehicle dealer’s general distinguishing number (GDN), an independent mobility motor vehicle dealer’s GDN or a wholesale motor vehicle dealer’s GDN issued by the TxDMV.

Listed also in this Glossary as:
Nonfranchised Motor Vehicle Dealer.

Dealer, Independent Mobility

A dealer who is not a franchised motor vehicle dealer, and holds a general distinguishing number issued by the TxDMV; holds a converter’s license issued under Occupations Code Chapter 2301, Sale or Lease of Motor Vehicles; is engaged in the business of buying, selling or exchanging motor vehicles defined by Occupations Code Section 2301.002(20-a), Definitions, and servicing or repairing the devices installed on mobility motor vehicles at an established and permanent place of business in Texas; and is certified by the manufacturer of each mobility device that the dealer installs, if the manufacturer offers that certification.

Listed also in this Glossary as:
Independent Mobility Motor Vehicle Dealer.

Decedent’s Estate

The real and personal property of a deceased person subject to distribution by will or the laws of descent and distribution. The term includes property held in joint tenancy or joint ownership with a right of survivorship.

DFPS

Department of Family and Protective Services.

Distributor

A person, other than a manufacturer, who distributes or sells new motor vehicles to a franchised motor vehicle dealer or enters into franchise agreements with franchised motor vehicle dealers on behalf of the manufacturer.

Documentary Fee

Separately stated charge for preparing and processing documents relating to the transfer of a motor vehicle.

Driver Education Car

A motor vehicle loaned free of charge by a dealer to a public school for use in an approved standard driver training course that is driven with exempt license plates.

E

Equipment Attachment

A part attached to a motor vehicle that is neither a component, nor an accessory, but which may be cargo that the vehicle transports, such as a welder, crane, compressor, or other type of equipment.

Equity

The value in a financed or mortgaged motor vehicle after deduction of charges against it.

Even Trade or Even Exchange

The exchange of a motor vehicle for another motor vehicle that involves no consideration other than the exchange of the motor vehicles. More than one motor vehicle can be exchanged for one or more other motor vehicles.

Listed also in this Glossary as:
Trade, Even.

F

Fair Market Value (FMV)

The total consideration a purchaser would agree to pay a seller on the open market to purchase a motor vehicle. The fair market value of a specific motor vehicle may be determined by consulting a nationally recognized motor vehicle value guide service or a nationally recognized motor vehicle value guide publication; or by a written appraisal prepared by a qualified appraiser employing generally accepted appraisal methods and techniques, setting forth an opinion as to the current market value of the identified motor vehicle and any accessories or equipment affixed to the motor vehicle.

Fair Market Value Deduction (FMVD)

A method by which the taxable value of a vehicle purchased for dealer use, lease or rental may be reduced.

Farm or Ranch

One or more tracts of land used, either wholly or in part, in the production of crops, livestock, and/or other agricultural products held for sale in the regular course of business. The term includes feedlots, dairy farms, poultry farms, commercial orchards, commercial nurseries, and similar commercial agricultural operations that are original producers of agricultural products. The term does not include, among other operations, home gardens, wildlife management, and timber operations.

Listed also in this Glossary as:
Ranch.

Farm Machine

A self-propelled motor vehicle specially adapted for, and whose primary use is in, the production of crops or rearing of livestock, including poultry or use in feedlots. The term includes a self-propelled motor vehicle specially adapted for distributing and applying plant-food materials, agricultural chemicals, or feed for livestock. The term does not include pickup trucks, or any self-propelled motor vehicle specifically designed, or specially adapted, to transport property other than the property 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 flatbed truck modified solely with a hay spear/spike, hay bale roll-out distribution device, or cube feeder of a size allowing the truck bed to be used for general purposes is an example of a vehicle that does not qualify as a farm machine.

Farm Trailer

A trailer or semitrailer designed and whose primary use is as a farm or ranch vehicle. This 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.

Listed also in this Glossary as:
Trailer, Farm.

Form 130-U

Short name for the Application for Texas Title and/or Registration.

Foster Parent

A person who under the authority of a governmental agency, or a private adoption or foster care agency provides foster or substitute care as defined in Tax Code Section 700.1301, for a child who is currently under the care of said foster parent in their home.

Franchised Motor Vehicle Dealer

A person who holds a franchised motor vehicle license issued under Occupations Code, Chapter 2301, Sale or Lease of Motor Vehicles; and is engaged in the business of buying, selling, or exchanging new motor vehicles at an established and permanent place of business under a franchise agreement with a manufacturer or distributor; or is licensed under similar regulatory requirements of another state or jurisdiction.

Listed also in this Glossary as:
Dealer, Franchised.

G

General Distinguishing Number (GDN)

A dealer license issued by the TxDMV under Transportation Code, Chapter 503, Dealers and Manufacturer’s Vehicles License Plates.

Gift

The transfer of a motor vehicle, subject to a $10 tax, in which an eligible person receiving a motor vehicle pays no consideration. The only transactions that qualify to be taxed as gifts are those wherein the motor vehicles are received from a

  • spouse (separate property);
  • parent or stepparent;
  • father/mother-in-law or son/daughter-in-law;
  • grandparent/grandparent-in-law or grandchild/grandchild-in-law;
  • child or stepchild;
  • sibling/sibling-in-law;
  • guardian; or
  • decedent’s estate (inherited).

A motor vehicle also qualifies to be taxed as a gift when it is donated to, or given by, a nonprofit service organization qualifying for exemption under Section 501(c)(3) of the Internal Revenue Code or when it is donated or given by certain revocable trusts.

Glider Kits

A set of parts that enable an owner to upgrade a truck or truck tractor to the equivalent of a later model; also called glove frames or rebuild kits.

Grandchild

The child of one's son or daughter by birth or legal adoption. The term "grandchild" includes a step-grandchild and the spouse of a grandchild as herein defined.

Grandparent

The father or mother of a child's parent or parents either by birth or legal adoption. The term "grandparent" includes a step-grandparent and the spouse of a grandparent as herein defined.

Gross Rental Receipts

Any amount of money or the value of property received by or due the owner of a motor vehicle as consideration for the rental of the vehicle to another including a reimbursement charge for property tax, title fee, and registration fee expenses. Gross rental receipts does not include, and tax is not due on, the following:

  • a separately stated fee or charge for insurance;
  • an assessment for damage to the vehicle which occurred during a rental agreement period;
  • separately stated receipts for motor fuel sold by the owner of the vehicle;
  • discounts; or
  • any amount of gross rental receipts tax collected by or due the owner of the vehicle.

Listed also in this Glossary as:
Rental Receipts.

Guardian

A person appointed by a court to have the legal authority over and care of the real and personal property or the person of a minor or an incapacitated person as evidenced by a certificate of guardianship or letters of guardianship. The term includes a

  • general, limited, temporary or successor guardian;
  • guardian of a local, county or regional guardianship program; or
  • certified public guardian or certified private professional guardian in the business of providing guardianship services.

The term does not include a guardian ad litem appointed to represent an incapacitated person in a guardianship proceeding.

H

Homemade or Shop-Made Motor Vehicle

A motor vehicle built from scratch using component parts, none of which are a motor vehicle.

Listed also in this Glossary as:
Shop-Made Vehicle.

House Trailer

A trailer designed for human habitation, including a park model. The term does not include mobile offices, manufactured homes, portable or prefabricated buildings, or ready-built homes.

Listed also in this Glossary as:
Trailer, House.


I

Independent Mobility Motor Vehicle Dealer

A dealer who is not a franchised motor vehicle dealer, and holds a general distinguishing number issued by the TxDMV; holds a converter’s license issued under Occupations Code Chapter 2301, Sale or Lease of Motor Vehicles; is engaged in the business of buying, selling or exchanging motor vehicles defined by Occupations Code Section 2301.002(20-a), Definitions, and servicing or repairing the devices installed on mobility motor vehicles at an established and permanent place of business in Texas; and is certified by the manufacturer of each mobility device that the dealer installs, if the manufacturer offers that certification.

Listed also in this Glossary as:
Dealer, Independent Mobility.

Inherited Motor Vehicle

A motor vehicle received by a person as specified by a deceased person’s will or by order of a probate court.

Listed also in this Glossary as:
Motor Vehicle, Inherited.

Insurance Adjuster

A person licensed under Insurance Code, Chapter 4101, Insurance Adjusters, or licensed or operating under similar regulatory requirements of another state.

International Registration Plan (IRP)

A reciprocity agreement among states of the U.S., the District of Columbia and provinces of Canada which recognizes the registration of commercial motor vehicles registered by other jurisdictions. See also Apportioned Plates and Cab Card in this Glossary.

Interstate Motor Vehicle

A motor vehicle that is operated in this state and another state or 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 International Registration Plan (IRP). The term includes a bus used in transportation of chartered parties if the bus meets all the standards required of other motor vehicles for apportioned registration fees. The term does not include a vehicle leased for less than 181 days or a vehicle that has Texas license plates and does not operate under the IRP.

Listed also in this Glossary as:
Motor Vehicle, Interstate.

Internal Revenue Code (IRC)

Code of federal statutory tax law in the U.S.

L

Lease

An agreement, other than a rental, by an owner of a motor vehicle to give exclusive use of that vehicle to another for consideration for longer than 180 days.

Lease/Purchase Agreement

A sales agreement under which the lessor (seller) retains title until the lessee (purchaser) has paid for the motor vehicle, at which time the conditional sale has been fulfilled and the title passes to the lessee. This is also known as a lease/purchase agreement.

Listed also in this Glossary as:
Conditional Sale .

Legal Entity

A form of business with distinct and independent existence, that is recognized by law and includes, but is not limited to, a sole proprietorship, partnership, limited partnership (LP), limited liability partnership (LLP), corporation or limited liability company (LLC) doing business in Texas.

Listed also in this Glossary as:
Business Entity or Legal Entity.

Lessee

A person who leases or lease/purchases (conditional sale) a motor vehicle from another.

Lessor

A person who acquires title to a new motor vehicle for the purpose of leasing the vehicle to another person.

Licensed Practitioner of the Healing Arts

A person licensed to practice the healing arts as set out in Occupations Code Section 104.003(b), (c), (e) and (g), Required Identification. This includes a person who is

  • licensed by the Texas Medical Board and holds a Doctor of Medicine degree;
  • licensed by the Texas Medical Board and holds a doctor of osteopathy degree;
  • licensed by the Texas Board of Chiropractic Examiners; or
  • licensed by the Texas State Board of Podiatric Medical Examiners.
Lien

A charge upon real or personal property for the satisfaction of some debt or duty ordinarily arising by operation of law.

Limited Liability Company (LLC)

A distinct legal entity formed by filing a certificate of formation with the Texas Secretary of State, or similar documents under the laws of another state or jurisdiction, that is separate from its shareholders, officers, and directors; is the sole owner of all corporate property; and must contain the word "corporation," "incorporated," "limited" or an abbreviation thereof in the corporate name. The term includes a for-profit corporation, nonprofit corporation, professional corporation, an S corporation for federal income tax purposes, limited liability company, professional limited liability company, a bank, state limited banking association, and savings and loan association. The term does not include a municipal corporation.

Listed also in this Glossary as:
Corporation.

Limited Liability Partnership (LLP)

A distinct legal entity formed by filing a certificate of formation with the Texas Secretary of State (SOS) or equivalent documents under the laws of another state or jurisdiction that

  • contains one or more general partners responsible for the day-to-day management of the partnership;
  • contains one or more limited partners who provide capital but do not participate in the day-to-day management of the partnership;
  • is separate from the partners who are not the owners or co-owners of the property of the partnership; and
  • must contain the words "limited," "limited partnership," or an abbreviation thereof in the partnership name.

The term includes a limited partnership registered as a limited liability limited partnership.

Listed also in this Glossary as:
Limited Partnership.

Limited Partnership (LP)

A distinct legal entity formed by filing a certificate of formation with the Texas Secretary of State (SOS) or equivalent documents under the laws of another state or jurisdiction that

  • contains one or more general partners responsible for the day-to-day management of the partnership;
  • contains one or more limited partners who provide capital but do not participate in the day-to-day management of the partnership;
  • is separate from the partners who are not the owners or co-owners of the property of the partnership; and
  • must contain the words "limited," "limited partnership," or an abbreviation thereof in the partnership name.

The term includes a limited partnership registered as a limited liability limited partnership.

Listed also in this Glossary as:
Limited Liability Partnership (LLP).

Limited Sales and Use Tax

The tax imposed under Tax Code Chapter 151.

Living Trust

A legal arrangement whereby a living person’s property is held.

M

Manufacturer

A person who manufactures or assembles new motor vehicles and holds a manufacturer's license issued under Occupations Code Section 2301.259, Application for Manufacturer’s License. The term does not include a person operating only as an ambulance manufacturer, chassis manufacturer, fire-fighting vehicle manufacturer, motor home manufacturer, or a converter, as those terms are defined in Occupations Code Section 2301.002, Definitions.

Manufactured Home

A HUD-code manufactured home that has a label or decal issued by the U.S. Department of Housing and Urban Development (HUD) and the Texas Department of Housing and Community Affairs permanently affixed to each section, industrialized housing that has a label or decal issued by the Texas Department of Licensing and Regulations permanently affixed to each module or modular component, or a mobile home. A manufactured home does not include a recreational vehicle, park model, or house trailer. Further, the term does not include a structure designed as a residence and constructed since June 15, 1976, that lacks a label or decal issued by the U.S. Department of Housing and Urban Development and the Texas Department of Housing and Community Affairs or by the Texas Department of Licensing and Regulations permanently affixed to each section, module, or modular component.

Manufacturer’s Certificate of Origin (MCO)

A document generated by the original manufacturer of a motor vehicle showing the date manufactured, the serial number assigned to the motor vehicle and other pertinent motor vehicle information. The MCO is also referred to as a Manufacturer’s Statement of Origin (MSO).

Mechanic’s Lien

A right to keep possession of property belonging to another person until a debt for service costs owed is discharged.

Mobile Home

A structure constructed before June 15, 1976; transportable in one or more sections, which in the traveling mode is eight body feet or more in width or 40 body feet or more in length, or when erected on site is 320 or more square feet; built on a permanent chassis; designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities; and that includes the plumbing, heating, air conditioning, and electrical systems.

Mobile Office

A self-contained transportable structure built on a permanent chassis, with or without wheels, axles, and a towing device, that is designed to be used as an office, sales outlet, or other workplace; such as a self-contained portable bathroom or a portable on-site dressing room. A food and beverage concession trailer is an example of a towable structure designed to be used as a sales outlet or other workplace.

Moped

A motor vehicle that is equipped with a rider's saddle and designed to have, when propelled, not more than three wheels on the ground; that cannot attain a speed in one mile of more than 30 miles per hour; and the engine of which cannot produce more than five-brake horsepower; and if an internal combustion engine, has a piston displacement of 50 cubic centimeters or less and connects to a power drive system that does not require the operator to shift gears.

Motor Vehicle

A vehicle described by Tax Code Section 152.001(3), Definitions. In general, a motor vehicle includes a self-propelled vehicle designed to transport persons or property upon the public highway and a vehicle designed to be towed by a self-propelled vehicle while carrying property. The term includes but is not limited to

  • automobiles;
  • buses;
  • vans;
  • motor homes;
  • motorcycles;
  • trucks and truck tractors;
  • truck cabs and chassis;
  • semitrailers;
  • trailers and travel trailers;
  • trailers sold unassembled in a kit;
  • dollies;
  • jeeps;
  • stingers;
  • auxiliary axles;
  • converter gears; and
  • park models, as defined by Rule 3.481, Imposition and Collection of Manufactured Housing Tax.

The term does not include a vehicle for which the certificate of title has been surrendered in exchange for a salvage vehicle title or a nonrepairable vehicle title issued under Transportation Code Chapter 501, Certificate of Title Act.

Motor Vehicle, Homemade or Shop-Made

A motor vehicle built from scratch using component parts, none of which are a motor vehicle.

Motor Vehicle, Inherited

A motor vehicle received by a person as specified by a deceased person’s will or by order of a probate court.

Listed also in this Glossary as:
Inherited Motor Vehicle.

Motor Vehicle, Interstate

A motor vehicle that is operated in this state and another state or 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 International Registration Plan (IRP). The term includes a bus used in transportation of chartered parties if the bus meets all the standards required of other motor vehicles for apportioned registration fees. The term does not include a vehicle leased for less than 181 days or a vehicle that has Texas license plates and does not operate under the IRP.

Listed also in this Glossary as:
Interstate Motor Vehicle.

Motor Vehicle Sales Tax

Texas tax imposed on the retail sale of a motor vehicle.

Motor Vehicle Use Tax

Texas tax imposed on a motor vehicle brought into Texas to operate on Texas public highways.

Motor Vehicle Used for Religious Purposes

A motor vehicle that is used primarily by a church or religious society, and not used primarily for the personal or official needs of a minister.

Motorcycle

A motor vehicle, other than a tractor or moped, that is equipped with a rider's saddle and designed to have, when propelled, not more than three wheels on the ground.

Motorcycle, Off-Highway

A vehicle, other than a tractor or moped, that is equipped with a rider's saddle, designed to propel itself with not more than three tires on the ground, and designed by the manufacturer for off-highway use only; and is subject to limited sales and use tax as tangible personal property.

Listed also in this Glossary as:
Off-Highway Motorcycle.

Moveable Specialized Equipment (MSE)

A unit designed and built specifically to perform a specialized function that does not include transporting property separate from itself or persons other than the driver. Examples of moveable specialized equipment meeting these criteria are motorized cranes, motorized oil well servicing units, and mobile auto crushers.

N

Negotiable Title

A title of a motor vehicle that is free of liens or other encumbrances and can be used to freely transfer the motor vehicle to another person.

Listed also in this Glossary as:
Title, Negotiable.

New Motor Vehicle

A motor vehicle that, without regard to mileage, has not been the subject of a retail sale.

New Resident

Any person, firm, corporation or association who moves into Texas with the intent to live or locate within the state within the meaning of Texas Tax Code Section 152.023. A natural person may demonstrate the necessary intent to live in Texas by establishing a fixed dwelling place in Texas, registering to vote in Texas or demonstrating a legal or economic constraint to live in Texas. A business entity may demonstrate the necessary intent to locate in Texas by establishing a fixed place of business in Texas, advertising that it is located in Texas or demonstrating a contractual obligation to locate in Texas. A new resident may also be a resident of other states. Once residency is established in Texas, a person, firm, corporation, or association may not subsequently become a new resident without showing that the residency formerly established in Texas was abandoned.

Nonfranchised Dealer

A person who holds an independent motor vehicle dealer’s general distinguishing number (GDN), an independent mobility motor vehicle dealer’s GDN or a wholesale motor vehicle dealer’s GDN issued by the TxDMV.

Listed also in this Glossary as:
Dealer, Nonfranchised.

North Atlantic Treaty Organization (NATO)

An intergovernmental military alliance between North American and certain European countries, also known as the North Atlantic Alliance.

O

Off-Highway Motorcycle

A vehicle, other than a tractor or moped, that is equipped with a rider's saddle, designed to propel itself with not more than three tires on the ground, and designed by the manufacturer for off-highway use only; and is subject to limited sales and use tax as tangible personal property.

Listed also in this Glossary as:
Motorcycle, Off-Highway.

Off-Highway Vehicle

Includes the following:

  • All-terrain vehicle (ATV) – A vehicle that is equipped with a seat or seats for the use of the rider and one or more passengers, designed to propel itself with three or more tires in contact with the ground, designed by the manufacturer for off-highway use, not designed by the manufacturer primarily for farming or lawn care, and not more than 50 inches in width;
  • Off-highway motorcycle (OHM) – A vehicle, other than a tractor or moped, that is equipped with a rider's saddle, designed to propel itself with not more than three tires on the ground, and designed by the manufacturer for off-highway use only;
  • Recreational off-highway vehicle (ROHV) – A vehicle that is equipped with a seat or seats for the use of the rider and one or more passengers, designed to propel itself with four or more tires in contact with the ground, designed by the manufacturer for off-highway use, and not designed by the manufacturer primarily for farming or lawn care;
  • Sand rail (SR) – A vehicle that is designed or built primarily for off-highway use in sandy terrains, including for use on sand dunes; has a tubular frame, an integrated roll cage, and an engine that is rear-mounted or placed midway between the front and rear axles of the vehicle; and has a gross vehicle weight of not less than 700 pounds and not more than 2,000 pounds; or
  • Utility vehicle (UTV) – A vehicle that is equipped with side-by side seating for the use of the operator and one or more passengers, designed to propel itself with at least four tires in contact with the ground, designed by the manufacturer for off-highway use, and designed by the manufacturer primarily for utility work and not for recreational purposes.
Oilfield Portable Unit (OPU)

A self-contained transportable structure that is

  • built on a permanent chassis, with or without wheels, axles and a towing device, designed to be used for temporary lodging or as temporary office space that does not require attachment to a foundation or to real property to be functional;
  • located exclusively upon, or immediately adjacent to, the lease premises or assigned acreage of an oil, gas, water disposal or injection well located within an oil or gas lease, field, pooled unit or unitized tract;
  • exclusively used to provide sleeping accommodations, temporary office space or any other temporary work space for employees, contractors or other workers at an oil, gas, water disposal or injection well; and
  • not a travel trailer, camper trailer, or recreational vehicle.
Open-Enrollment Charter School

A school that has been granted a charter under Education Code Chapter 12, Subchapter D, Open-Enrollment Charter School.

Open Title

A title of a motor vehicle on which the previous owner of the motor vehicle (or person acting under power of attorney) has signed the back of a title but has not filled in the name of the person to whom the motor vehicle is to be transferred.

Listed also in this Glossary as:
Title, Open.

Operating Lease

A lease 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.

Operation of Law

A change or transfer which occurs automatically due to existing laws and not an agreement or court order.

Orthopedically Handicapped Person

An individual who has limited movement of body extremities and/or loss of motor functions. The physical impairment must be such that the person is either unable to operate, or be transported in a reasonable manner in, a motor vehicle that has not been specially modified.

Owner

The person named in the Texas certificate of title of a motor vehicle as the owner of the vehicle, or a person having exclusive use of a motor vehicle under a rental agreement and who holds the motor vehicle for re-rental.

P

Park Model

A trailer designed to be used for human habitation, with or without a permanent foundation, when connected to the required utilities, and is less than eight feet six inches in width and 45 feet in length in the traveling mode; includes the plumbing, heating, air conditioning and electrical systems; and is not required to be affixed with a label or decal issued by the U.S. Department of Housing and Urban Development and by the Texas Department of Housing and Community Affairs.

Listed also in this Glossary as:
Trailer, Park Model.

Partnership

An association of two or more parties to carry on a business for profit that agree to share profits and losses and mutually participate in managing the business; and is a distinct legal entity separate from the partners who are not the owners or co-owners of the property of the partnership. The term does not include a joint stock company, joint venture, or the mere co-ownership of property.

Person

Includes an individual, officer, director, member, partner, partnership, limited liability partnership, corporation, limited liability company, association or other legal entity.

Parent

The biological mother or father of a child, or the mother or father of a child by virtue of legal adoption, or a person who, pursuant to Family Code Chapter 160, is presumed to be a biological parent or has executed an acknowledgment of parenthood or has been adjudicated to be the biological parent by court decree. The term ''parent" includes foster parent and stepparent as the terms are defined in this Glossary.

Primary Use

Use of at least 80 percent of a motor vehicle’s operating time with respect to motor vehicles qualifying for the following exemptions: use by a church or religious society; use by an orthopedically handicapped driver or passenger; farm machines, trailers and semi-trailers qualifying for exemption for use for farming or ranching; and timber machines and trailers qualifying for exemption in timber operations.

Private-Party Transaction

A retail sale of a motor vehicle in which no party is a dealer.

Public Agency

Includes the following:

  • a department, commission, board, office, institution or other agency of this state, or of a county, city, town, school district, hospital district, water district or other special district, authority or political subdivision created by or under the constitution or the statutes of this state, or an unincorporated agency or instrumentality of the U.S. A public agency can include any college or university created or authorized by the Texas constitution or Texas statutes;
  • all independent boards, commissions, agencies, or corporations that are instrumentalities of the U. S. and are wholly owned by the U.S. or by another corporation wholly owned by the U.S., including organizations specifically exempted as an instrumentality of the U.S. by federal statute, such as a federal credit union, federal reserve bank, or federal home loan bank; and
  • open-enrollment charter schools.
Purchase Date

The day the purchaser takes possession of a motor vehicle unless otherwise specified by written agreement.

Listed also in this Glossary as:
Date of Sale
Sale Date
.


R

Ranch

One or more tracts of land used, either wholly or in part, in the production of crops, livestock, and/or other agricultural products held for sale in the regular course of business. The term includes feedlots, dairy farms, poultry farms, commercial orchards, commercial nurseries, and similar commercial agricultural operations that are original producers of agricultural products. The term does not include, among other operations, home gardens, wildlife management, and timber operations.

Listed also in this Glossary as:
Farm or Ranch.

Recreational Vehicle (RV)

A vehicle which is self-propelled or designed to be towed by a motor vehicle but is not designed to be used as a permanent dwelling, and which contains plumbing, heating, and electrical systems that may be operated without connection to outside utilities. Examples include, but are not limited to, travel trailers, camper trailers, and motor homes.

Related Finance Company (RFC)

A person in which at least 80 percent of the ownership is identical to the ownership of a dealer, as defined by Transportation Code Section 503.001, Definitions.

Rental

An agreement by the owner of a motor vehicle to give, for no longer than 180 days, the exclusive use of that vehicle to another for consideration; an agreement by the original manufacturer of a motor vehicle to give exclusive use of the motor vehicle to another for consideration; or an agreement to give exclusive use of a motor vehicle to another for re-rental purposes, regardless of the period of time covered by the agreement.

Rental Receipts

Any amount of money or the value of property received by or due the owner of a motor vehicle as consideration for the rental of the vehicle to another including a reimbursement charge for property tax, title fee, and registration fee expenses. Gross rental receipts does not include, and tax is not due on, the following:

  • a separately stated fee or charge for insurance;
  • an assessment for damage to the vehicle which occurred during a rental agreement period;
  • separately stated receipts for motor fuel sold by the owner of the vehicle;
  • discounts; or
  • any amount of gross rental receipts tax collected by or due the owner of the vehicle.

Listed also in this Glossary as:
Gross Rental Receipts.

Rented in Texas

A motor vehicle is “rented in Texas” when the vehicle is delivered to the renter in Texas regardless of the location of the rental agency. A motor vehicle is not “rented in Texas” if the vehicle is delivered to the renter outside the state of Texas or to a common carrier for transportation to the renter outside of Texas.

Replaced Motor Vehicle

For purposes of the fair market value deduction, a motor vehicle titled in Texas and taken out of service in Texas. A replaced motor vehicle is no longer used for business or personal purposes in Texas and is either sold or offered for sale in the regular course of business.

Repossession

The act of seizing a motor vehicle on which there is a valid lien recorded when a purchaser defaults on the motor vehicle’s payments.

Resident

Any person who lives in the state, and any firm, corporation or association which is physically located in the state or other person who is domiciled or doing business in this state. A person who is temporarily living in the state, and retains a permanent home in another state, is nevertheless a resident of Texas for purposes of the Texas Tax Code Section 152.022. A person, firm, corporation or association may be a resident of more than one state at a time.

Retail Sale

A sale of a motor vehicle other than a sale for resale; or a sale for lease, meaning a sale to a franchised motor vehicle dealer of a new motor vehicle removed from the franchised motor vehicle dealer's inventory for the purpose of entering into a contract to lease the motor vehicle to another person if, within seven days of executing the lease contract, the franchised motor vehicle dealer transfers title of the motor vehicle and assigns the lease contract to the lessor of the motor vehicle. If the title is not transferred and the lease assigned within seven calendar days, the dealer's purchase and use will be presumed to be a retail purchase and taxable. The presumption may be overcome by showing evidence of intent.

S

Sale Date

The day the purchaser takes possession of a motor vehicle unless otherwise specified by written agreement.

Listed also in this Glossary as:
Date of Sale
Purchase Date
.

Sale for Resale

The sale of a motor vehicle to a purchaser who acquires the motor vehicle either for the exclusive purpose of sale in a manner provided by law, or for purposes allowed by the TxDMV under Transportation Code Chapter 503, Dealer’s and Manufacturer’s Vehicle License Plates, when the purchaser is a distributor, a manufacturer, or a dealer.

Seller-Financed Sale

A retail sale of a motor vehicle by a dealer in which the selling dealer collects all or part of the total consideration in periodic payments and retains a lien on the motor vehicle until all payments have been received. The term does not include a retail sale of a motor vehicle in which a person other than the seller provides the total consideration for the sale and retains a lien on the motor vehicle as collateral, lease, or rental.

Shop-Made Vehicle

A motor vehicle built from scratch using component parts, none of which are a motor vehicle.

Listed also in this Glossary as:
Homemade or Shop-Made Motor Vehicle.

Sibling

One of two or more individuals having one common parent by birth, legal adoption or marriage. The term includes brother, sister, half-brother, half-sister, step-brother or step-sister, brother-in-law or sister-in-law.

Standard Presumptive Value (SPV)

The private-party transaction value of a motor vehicle as determined by the TxDMV based on an appropriate regional guidebook of a nationally recognized motor vehicle value guide service or based on another motor vehicle guide publication that the TxDMV determines is appropriate if a private-party transaction value for the motor vehicle is not available from a regional guidebook.

Stepchild

The biological or adopted child of one's current spouse from a previous marriage whose parent-child relationship is through marriage only and not by birth or adoption.

Stepparent

The current spouse of a child’s mother or father whose only relationship to the child is through marriage and not by birth or adoption.

Storage Lien

A right to keep possession of property belonging to another person until a debt for property storage costs owed is discharged.

Substitution of Collateral

The process of substituting a motor vehicle that is being held as collateral with another motor vehicle of the same or greater value.

T

Tax Receipt

Form VTR-500, RTS Receipt.

Tax, Title and License (TT&L)

Referring to motor vehicle tax, titling and registration fees usually collected by a dealership on the sale of a motor vehicle.

Texas Agricultural and Timber Exemption Registration Number (Ag/Timber Number)

The 11-digit registration number issued by the Comptroller’s office to farmers, ranchers, agricultural producers and timber operations.

Listed also in this Glossary as:
Agricultural and Timber Exemption Registration Number.

Texas Emissions Reduction Plan (TERP) Surcharge

A fee imposed on a retail sale or use in Texas of an on-highway motor vehicle that is diesel powered and registered with a gross vehicle weight in excess of 14,000 pounds. The surcharge is imposed by Tax Code Section 152.0215, Texas Emissions Reduction Plan Surcharge, for the benefit of the Texas Emissions Reduction Plan Fund as provided in Health and Safety Code Section 386.251, Texas Emissions Reduction Plan Account.

Third-Party Trade-In

The action by a person who purchases a new motor vehicle from a dealer but sells a used motor vehicle directly to a third party, rather than trading the motor vehicle to the dealer.

Listed also in this Glossary as:
Trade-In, Third-Party.

Timber Machine

A self-propelled motor vehicle specially adapted to perform a specialized function for use primarily in timber operations, such as land preparation, planting, maintenance, and harvesting of trees. The term does not include any self-propelled motor vehicle specifically designed or adapted for the primary purpose of transporting timber or timber products, including a self-propelled motor vehicle designed to transport cargo and adapted with a cargo-loading device. The term also does not include field service vehicles, such as those used to fuel or maintain other vehicles or crew vehicles.

Timber Operations

The production of timber, meaning the activities to prepare the production site or to plant, cultivate, or harvest commercial timber that will be sold in the regular course of business.

Timber Trailer

A trailer designed for and used primarily in a timber operation.

Listed also in this Glossary as:
Trailer, Timber.

Title

A printed record of title for a motor vehicle under Transportation Code Section 501.021, Title for Motor Vehicle, by the Texas Department of Motor Vehicles (TxDMV). The blue copy is the original and becomes the "owner’s" copy when the motor vehicle is paid off.

Listed also in this Glossary as:
Certificate of Title.

Title Owner

The person/entity named as the owner of a motor vehicle on the Certificate of Title. It also includes a person/entity who is the legal owner because of a lease/purchase or conditional sales contract where the seller retains title until full payment is made.

Title, Assigned

A title of a motor vehicle on which the previous owner (or a person acting under power of attorney) signed the back of a title and indicated the name of the person to whom the motor vehicle was being transferred.

Listed also in this Glossary as:
Assigned Title.

Title, Negotiable

A title of a motor vehicle that is free of liens or other encumbrances and can be used to freely transfer the motor vehicle to another person.

Listed also in this Glossary as:
Negotiable Title.

Title, Open

A title of a motor vehicle on which the previous owner of the motor vehicle (or person acting under power of attorney) has signed the back of a title but has not filled in the name of the person to whom the motor vehicle is to be transferred.

Listed also in this Glossary as:
Open Title.

Titling Trust

A trust whose activities are limited to owning leased motor vehicles and the related leases. Re-titling and re-registration of the leased motor vehicles is not required because the titling trust owns the motor vehicles and is the lessor.

Token Tag or Plate

A license plate for a trailer towed by a truck tractor where the registration fees are applied to the pulling unit; also referred to as token trailer.

Listed also in this Glossary as:
Trailer, Token.

Total Consideration

Includes the following:

  • the amount paid or to be paid for a motor vehicle and its accessories attached on or before the sale, without deducting the cost of the motor vehicle;
  • the cost of material, labor or service, interest paid, loss, or any other expense;
  • the cost of transportation of the motor vehicle before its sale; or
  • the amount of manufacturers' or importers' excise tax imposed on the motor vehicle by the U.S.

The amount paid or to be paid includes

  • anything of monetary value, such as cash or the equivalent;
  • a book entry reflecting cash received or paid;
  • the forgiveness or assumption of debt;
  • book entries reflecting accounts receivable or accounts payable for an item;
  • the performance of a service; or
  • real or tangible personal property.

Total consideration does not include

  • separately stated cash discounts;
  • a full cash or credit refund to a customer of the sales price of, meaning the amount paid for a motor vehicle that the customer returns to the seller;
  • the amount charged for labor or service rendered in installing, applying, remodeling, or repairing the motor vehicle sold;
  • separately stated finance or interest charges on credit extended under a conditional sale or other deferred payment contract;
  • the value of a motor vehicle taken by a seller as all or a part of the consideration for sale of another motor vehicle;
  • the fair market value deduction of a motor vehicle titled in Texas in the name of a dealer or a person who is in the business of renting or leasing motor vehicles, as provided by Rule 3.73, Qualifying for Fair Market Value Deduction and Determination of Fair Market Value for Replaced Vehicles;
  • a charge for transportation of the motor vehicle after the sale of the motor vehicle;
  • motor vehicle inventory tax, separately stated charges to prepare and process documents related to the transfer of a motor vehicle, fees to register and/or apply for a certificate of title, fees or charges prescribed by law in connection with the sale or inspection of the motor vehicle, and any additional fees charged by the deputy of a county tax assessor-collector; or
  • separately stated charges for the sale of an extended warranty, maintenance agreement, service contract, insurance, automobile club membership, roadside assistance program, or a debt cancellation agreement.
Tractor

A motor vehicle designed and used primarily for drawing other vehicles, but not constructed for carrying a load other than part of the weight of the vehicle and load so drawn.

Trade Difference

The sales price difference remaining after deducting the allowance for a motor vehicle traded by the purchaser on the purchase of another motor vehicle.

Trade Down

An exchange of a motor vehicle for a motor vehicle of lesser value.

Trade, Even

The exchange of a motor vehicle for another motor vehicle that involves no consideration other than the exchange of the motor vehicles. More than one motor vehicle can be exchanged for one or more other motor vehicles.

Listed also in this Glossary as:
Even Trade or Even Exchange.

Trade-In Allowance

A credit against the purchase price of a new motor vehicle when a purchaser trades in a motor vehicle to the seller. The allowance for the motor vehicle traded in is the value of the vehicle and not necessarily the equity in that vehicle.

Listed also in this Glossary as:
Trade-In Value.

Trade-In, Third-Party

The action by a person who purchases a new motor vehicle from a dealer but sells a used motor vehicle directly to a third party, rather than trading the motor vehicle to the dealer.

Listed also in this Glossary as:
Third-Party Trade-In.

Trade-In Value

A credit against the purchase price of a new motor vehicle when a purchaser trades in a motor vehicle to the seller. The allowance for the motor vehicle traded in is the value of the vehicle and not necessarily the equity in that vehicle.

Listed also in this Glossary as:
Trade-In Allowance.

Trailer

A vehicle without automotive power that is designed for human habitation or for carrying property upon a permanent chassis with wheels, axles, and a towing device, and that is designed to be drawn by a self-propelled motor vehicle. The term includes, but is not limited to, semitrailers, vans, flatbeds, tanks, dumpsters, trailers sold unassembled in a kit, dollies, jeeps, stingers, auxiliary axles, converter gears, bunkhouses, travel trailers, park models, and house trailers. The term does not include a unit designed to be towed by a self-propelled vehicle that meets the definition of moveable specialized equipment or a mobile office.

Trailer, Farm

A trailer or semitrailer designed and whose primary use is as a farm or ranch vehicle. This 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.

Listed also in this Glossary as:
Farm Trailer.

Trailer, House

A trailer designed for human habitation, including a park model. The term does not include mobile offices, manufactured homes, portable or prefabricated buildings, or ready-built homes.

Listed also in this Glossary as:
House Trailer.

Trailer, Park Model

A trailer designed to be used for human habitation, with or without a permanent foundation, when connected to the required utilities, and is less than eight feet six inches in width and 45 feet in length in the traveling mode; includes the plumbing, heating, air conditioning and electrical systems; and is not required to be affixed with a label or decal issued by the U.S. Department of Housing and Urban Development and by the Texas Department of Housing and Community Affairs.

Listed also in this Glossary as:
Park Model.

Trailer, Timber

A trailer designed for and used primarily in a timber operation.

Listed also in this Glossary as:
Timber Trailer.

Trailer, Token

A license plate for a trailer towed by a truck tractor where the registration fees are applied to the pulling unit; also referred to as token trailer.

Listed also in this Glossary as:
Token Tag or Plate.

Trailer, Travel or Recreational

A trailer designed for human habitation as temporary living quarters in connection with recreational, camping, travel, or seasonal use that is not designed to be used as a permanent dwelling; is less than eight feet six inches in width and 45 feet in length in the traveling mode and contains plumbing, heating, and electrical systems that may be operated without connection to outside utilities; and is not a utility trailer, enclosed trailer, or other trailer that is not designed for human habitation as its primary function.

Listed also in this Glossary as:
Travel Trailer or Recreational Trailer.

Travel Trailer or Recreational Trailer

A trailer designed for human habitation as temporary living quarters in connection with recreational, camping, travel, or seasonal use that is not designed to be used as a permanent dwelling; is less than eight feet six inches in width and 45 feet in length in the traveling mode and contains plumbing, heating, and electrical systems that may be operated without connection to outside utilities; and is not a utility trailer, enclosed trailer, or other trailer that is not designed for human habitation as its primary function.

Listed also in this Glossary as:
Trailer, Travel or Recreational.

Trip Permit

A permit issued by a member jurisdiction in lieu of apportioned or full registration.

Truck

A power unit designed, used or maintained primarily for the transportation of property.

Truck Tractor

A motor vehicle designed and used primarily to draw another vehicle but not constructed to carry a load other than a part of the weight of the other vehicle and its load.

TxDMV

Texas Department of Motor Vehicles.

U

Used Motor Vehicle

A motor vehicle that was previously the subject of a retail sale.

V

Vehicle Identification Number (VIN)

A number that is unique to a motor vehicle, assigned when the vehicle is manufactured.

W

Wholesale Motor Vehicle Dealer

A dealer who sells motor vehicles only to persons who hold a dealer’s general distinguishing number.


96-254
(09/2021)

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