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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

Motor Vehicle Use Tax

Motor vehicle use tax is due on every motor vehicle purchased outside Texas and brought into the state for public highway use by a Texas resident or by a person domiciled or doing business in Texas. If the motor vehicle is brought into Texas for use on public roads and highways, Texas motor vehicle use tax is due.

Payment of motor vehicle use tax is the responsibility of the person who owns or operates the vehicle in Texas. This person pays the motor vehicle use tax to the county tax assessor-collector (CTAC) at the time they title and register the motor vehicle.

Tax Base

For retail sales of new and used motor vehicles involving motor vehicle dealers licensed in Texas (see Use Tax Due on Texas-Purchased Motor Vehicles in this section) or in another state, Texas law bases the motor vehicle use tax on a motor vehicle’s sales price, with no deduction allowed for depreciation or use prior to entering Texas.

The selling dealer’s signature on the title application is an acceptable record of the sales price. The CTAC, however, can request the dealer’s invoice or sales receipt from the purchaser.

For a private-party purchase of a used motor vehicle from an out-of-state seller, whereupon the vehicle is brought into Texas for use, standard presumptive value (SPV) procedures apply.

The person applying for a certificate of title or registration for a motor vehicle purchased outside of Texas must furnish the CTAC with a Form 130-U, Application for Texas Title and/or Registration (PDF), which includes a joint certification signed by both the purchaser and seller, attesting to the sales price information on the Form 130-U (PDF).

If the CTAC has reason to question the truth or accuracy of the information, or if both parties to the transaction have not signed the form, the CTAC can require either party to furnish additional documents about the motor vehicle’s sales price. For a motor vehicle acquired out of state, the purchaser can provide a bill of sale signed by the seller. An out-of-state seller, however, cannot be compelled to sign Form 130-U (PDF).

Trade-In Allowance

If a purchaser traded in a motor vehicle to the seller as part of the purchase transaction, the purchaser will pay the use tax on the trade difference. The allowance for the motor vehicle traded in is the value of the vehicle and not the equity in that vehicle. SPV is not used to determine the value of the trade-in vehicle.

Use Tax Due on Texas-Purchased Motor Vehicles

Tax Code Section 152.028, Use Tax on Motor Vehicle Brought Back Into State, imposes motor vehicle use tax on a motor vehicle purchased tax free in Texas for use exclusively outside of Texas but is subsequently brought back to Texas for use. The person who purchased the vehicle tax free in Texas and returned it to Texas owes the tax.

Credit

Credit toward the Texas motor vehicle use tax is allowed for legally imposed sales or use tax paid to another state, Puerto Rico and any U.S. possession or territory. No credit is allowed for tax paid to a foreign country.

Credit is not allowed against the $90 New Resident Tax or Texas Emissions Reduction Plan (TERP) Surcharge.

Texas Residents

Motor vehicle use tax is due from a Texas resident who purchases a motor vehicle while temporarily out of state and brings it into Texas for use in Texas. Such persons might be military personnel with Texas as their home state of record, students or persons temporarily employed out of state.

Military Personnel

Texas military personnel whose home state of record is Texas are subject to motor vehicle use tax on motor vehicles purchased out of state but titled and registered in Texas.

Military personnel moving to Texas, whose home state of record is not Texas, owe motor vehicle use tax on motor vehicles that have been purchased out of state but have not been previously registered in their name.

For military personnel whose home state of record is not Texas to qualify for the $90 New Resident Tax, the motor vehicle must already be registered in the military personnel’s name before registering it in Texas.

Active duty military personnel have 60 days from a motor vehicle’s first use in Texas to title and register the vehicle. Tax is not due until that time.

Motor Vehicles Previously Titled and Registered With Tax Paid in Texas

Another state may require a former Texas resident or a Texas resident living temporarily in the other state to title a motor vehicle in that state even though the resident has previously registered and paid tax on the vehicle in Texas. There is no liability for additional tax due when the resident returns to Texas with the same motor vehicle and presents a copy of a tax receipt or other document showing that they previously titled or registered that motor vehicle, in the resident’s name, in Texas.

Leased Motor Vehicles

Motor vehicle use tax is due on motor vehicles brought into Texas for public highway use when leased outside of Texas by a Texas resident or by a person who is domiciled or doing business in Texas. The tax is the responsibility of the person bringing the motor vehicle into Texas. For more information see Leases in this guide.

Credit

Credit is allowed for legally imposed sales tax paid by the lessor or the lessee up to the time the lessee brings the motor vehicle into Texas. If additional tax is due to the other state, the lessee may apply to the Comptroller’s office for additional credit (refund) at the end of the lease.

Calculating Use Tax Due

For retail sales of new and used motor vehicles involving motor vehicle dealers licensed in other states, motor vehicle use tax is based on the vehicle’s sales price less any allowance for trade-in vehicle(s). Tax paid in the other state reduces the amount of Texas use tax due.

For example, if a Texas purchaser traded in a vehicle worth $6,000 for a $15,000 motor vehicle sold by a licensed Oklahoma dealer, and paid Oklahoma sales tax, the Texas purchaser owes Texas motor vehicle use tax as follows:

Item Amount
Total Sales Price $ 15,000.00
Less Trade-In - 6,000.00
Taxable Value $ 9,000.00
Tax Rate x .0625
Use Tax Due $ 562.50
Less Credit for Tax Paid to Oklahoma - 180.00
Net Texas Use Tax $ 382.50

The selling dealer’s signature on the title application is an acceptable record of the sales price. The CTAC, however, can request the dealer’s invoice or sales receipt from the purchaser.

For private-party purchases of used motor vehicles from out of state for Texas use, SPV procedures may apply.


96-254
(09/2021)

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