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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

Salvage and Non-Repairable Vehicles

A unit is no longer a motor vehicle for tax purposes if it

  • has a salvage certificate or a non-repairable motor vehicle certificate of title issued pursuant to the Certificate of Title Act;
  • has a certificate of authority for an abandoned motor vehicle; or
  • is a unit that has been declared a total loss by an insurance company.

A salvage vehicle also includes a unit that has a similar ownership document issued from another state.

Tax Due

Purchases of unrepaired salvage vehicles are subject to Texas sales and use tax. The seller will collect and remit the sales tax directly to the Comptroller’s office. The county tax assessor-collector (CTAC) has no responsibility to ensure sales tax was paid. See Publication 98-776, Salvage Vehicles: What Tax is Due (PDF)? for more information.

Transferring Title and Collecting Tax

Unrepaired Vehicle – Salvage Title to Salvage Title

When transferring the title of an unrepaired salvage vehicle from salvage title to salvage title, the following conditions apply:

  • The title applicant has purchased an unrepaired salvage vehicle.
  • The transaction is subject to sales tax, not motor vehicle tax.
  • The CTAC will not collect motor vehicle tax.

Repaired Vehicle – Seller Performed Repairs; Seller Licensed Texas Dealer

When transferring the title of a repaired salvage vehicle from a salvage title to a motor vehicle title with a rebuilt remark, the following conditions apply:

  • TxDMV Form VTR-61, Rebuilt Vehicle Statement (PDF), indicates the seller performed the repairs.
  • The title applicant has purchased a repaired motor vehicle; motor vehicle sales tax is due.
  • The CTAC should collect motor vehicle tax based on the sales price.
  • The licensed dealer will collect and remit the motor vehicle tax to CTAC at the time of title transfer.

Repaired Vehicle – Seller Performed Repairs; Seller is Not a GDN Dealer

When transferring the title of a repaired salvage vehicle from a salvage title to a motor vehicle title with a rebuilt remark, the following conditions apply:

Repaired Vehicle – Purchaser Performed Repairs; Seller is or is Not a Licensed Texas Dealer

When transferring the title of a repaired salvage vehicle from a salvage title to a motor vehicle title with a rebuilt remark, the following conditions apply:

  • TxDMV Form VTR-61 (PDF) indicates purchaser performed the repairs.
  • The title applicant has purchased an unrepaired salvage vehicle. It is subject to sales tax, not motor vehicle tax.
  • The CTAC will not collect motor vehicle tax.

Knowing what the vehicle was (for example, a motor vehicle or tangible personal property) at the time of the transaction (sale or purchase) determines if sales and use tax or motor vehicle tax is due. When dealing with salvage vehicles, taxability and title administration do not always coincide with the title displayed in RTS. For tax purposes, a salvage vehicle includes both an unrepaired salvage titled vehicle and a vehicle declared a total loss by an insurance company.


96-254
(09/2021)

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