A motor vehicle dealer can issue a resale certificate in lieu of paying tax when buying parts that will be resold as a part of a motor vehicle. (Of course, to be able to issue a valid resale certificate, the dealer must hold a sales tax permit.) Not all items that a dealer may attach to a vehicle qualify to be purchased for resale, however. There are also tax responsibilities for dealers who offer extras (like free oil changes) as sales incentives.
A dealer can buy temporary red-lettered paper license plates tax-free for resale because they are conveyed with the vehicle to the buyer. A dealer must pay tax, however, on window stickers and promotional items such as medallions and plates with the dealer's name printed on them, since they are given away with the vehicles to advertise the dealer's business. Black-lettered plates designed for in-transit use are also taxable.
Tax on items that can only used for promotion must be paid at the time of purchase. A dealer cannot buy these promotional items for resale and then accrue tax on them later, when they are used.
Sometimes a dealer will provide free oil changes after a sale in order to encourage someone to buy a vehicle. These oil changes are taxable to the dealer because the oil, filter, and lubricants are promotional items that are not resold as part of the sales price of the car. The same is true for other items, such as television sets, soft drinks at grand openings and the like, given away by a dealer to promote sales.
Items bought by a dealer to satisfy a manufacturer's warranty are treated differently, however. A manufacturer's warranty is a guarantee given to the buyer for no additional cost that the vehicle will remain operable for a specified period of time. No tax is due on parts or labor paid for by the manufacturer to repair a vehicle under their warranty or due to a recall campaign.
Promotional items are not the same as items used to fulfill a warranty, because they are not provided primarily as part of a guarantee that a vehicle will remain operable.
In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Google Chrome, Microsoft Internet Explorer and Apple Safari.