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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

MOTORCYCLES, AUTOCYCLES, AND OFF-HIGHWAY VEHICLES – WHICH TEXAS TAX IS DUE?

The tax assessed on the sale of motorcycles, autocycles, and off-highway vehicles is based on whether the vehicle is designed for on highway use or off-highway use.

Motorcycles and Autocycles – Motor Vehicle Sales and Use Tax

In general, a motor vehicle includes a self-propelled vehicle designed to transport persons or property upon the public highways. Motorcycles (including mopeds) and autocycles designed for use on public highways are subject to Texas motor vehicle sales tax.

Motor Vehicle Sales and Use Tax Rate

The motor vehicle sales and use tax rate is 6.25 percent. There is no local motor vehicle tax.

Dealer Sales

A 6.25 percent motor vehicle tax is due on the motor vehicle’s total consideration (sales price), less any amount given for a motor vehicle accepted by the seller as a trade-in as part of the same transaction as the sale. An off-highway vehicle (OHV) cannot be used as a trade-in to reduce the taxable value of a motor vehicle.

The following charges are not part of the sales price and are not taxable, when separately stated:

  • motor vehicle inventory tax
  • charges to prepare and process documents related to the transfer of a motor vehicle
  • fees to register and/or apply for certificate of title
  • fees or charges prescribed by law in connection with the sale or inspection of the motor vehicle
  • fees charged by the deputy of a county tax assessor-collector (CTAC)

A Texas dealer is required to

Motor vehicle tax is due within 30 calendar days after the date of sale. Motor vehicle tax is a debt of the buyer to the dealer until paid.

Private-Party Sales

In a private-party sale, in which no party is a dealer, the buyer must remit the motor vehicle tax to the CTAC when the Form 130-U is presented for titling and/or registration.

Motor vehicle tax is due on the greater of the sales price paid for the motor vehicle or 80 percent of the motor vehicle’s standard presumptive value (SPV). The motor vehicle tax is due within 30 calendar days after the date of sale.

Off-Highway Vehicles – Sales and Use Tax

Generally, an off-highway vehicle (OHV) includes a vehicle designed to propel itself and designed by the manufacturer for off-highway use. An OHV purchased in Texas is subject to Texas sales tax.

Examples of OHVs include

  • all-terrain vehicles (ATVs)
  • off-highway motorcycles (OHMs), including dirt bikes and mini bikes
  • recreational off-highway vehicles (ROHVs)
  • sand rails (SRs)
  • utility vehicles (UTVs)

Sales and Use Tax Rate

The sales and use tax rate includes the state sales and use tax rate of 6.25 percent and local taxes up to an additional 2 percent.

Sales tax and use tax are the same rate. Use the Sales Tax Rate Locator to search for tax rates by address.

Sales Tax

Buyers owe sales tax when purchasing OHVs and their accessories in Texas.

Sales tax is due on the OHV’s sales price, less any amount given for a trade-in. Traded items (tangible personal property) must be similar to the type of items sold by the seller in their regular course of business.

The sales price includes the total amount paid for the OHV including

  • vehicle inventory tax
  • charges to prepare and process documents related to the transfer of the off-highway vehicle
  • fees charged to apply for certificate of title

A Texas seller is required to

  • have a Sales and Use Tax Permit issued by the Comptroller’s office;
  • collect sales tax on each retail sale, unless an exemption applies; and
  • remit the collected sales tax to the Comptroller’s office.

The sales tax is due from the customer at the time of purchase. Sales tax is a debt of the buyer to the seller until paid.

Use Tax

Purchasers owe use tax for OHVs and their accessories bought in another state for use in Texas, when the seller does not have a Texas Sales and Use Tax permit and does not collect Texas sales tax.

Use tax is complementary to sales tax and is due on all taxable items purchased out of state for use in Texas. Use tax applies to both businesses and individuals and is imposed when an off-highway vehicle (and its accessories) is first brought into Texas. By paying the use tax due after completing an out-of-state purchase, Texas buyers can avoid the Comptroller’s office billing for any unpaid tax, penalty and interest charges.

Effective Sept. 1, 2019, purchasers of new OHVs, including ATVs, OHMs, ROHVs, SRs, and UTVs from an out-of-state seller brought into Texas for storage or use is required to provide the CTAC’s office proof that Texas use tax has been paid to the Comptroller’s office when submitting an application for title on or after March 1, 2020.

For example, if you purchase a new OHV from a retailer in Oklahoma who does not charge Texas tax, and you store or use the OHV in Texas, you owe Texas use tax. Use tax is due on the sales price of the OHV by paying online or by mail using Form 01-163, Texas Use Tax Return – for New Off-Highway Vehicles Purchased From Out of State Retailers (PDF).

Agricultural and Timber Exemptions

OHVs, such as ATVs and UTVs, are exempt from sales and use tax when used exclusively in the production of agricultural or timber products for sale on a farm, ranch or in a timber operation, whether purchased in Texas or out-of-state.

Sales and use tax is due on OHVs used for recreational riding, hunting, wildlife management or any other purpose.

Agricultural Exemption

The agricultural exemption from sales and use tax applies to OHVs used exclusively on a farm or ranch to

  • build or maintain roads;
  • build or maintain water facilities; or
  • produce agricultural products sold in the regular course of business.

Timber Exemption

For timber operations, the sales and use tax exemption applies to OHVs used exclusively in the production of timber products for sale.

Other Uses

The exemption is lost when an OHV is used for any other purpose, even if the OHV is also used to produce agricultural or timber products.

Example – A UTV qualifies for the exemption when used exclusively on a farm to spray crops, feed cattle and repair fences or for similar farm-related activities. The exemption is lost if the UTV is used for non-qualified activities such as hunting or recreational riding.

When an OHV purchased tax free under an agricultural or timber exemption loses the exemption, use tax is due. Use tax is based on the OHV’s original sales price and can be remitted by submitting Form 01-156, Texas Use Tax Return (PDF), along with a use tax payment to the Comptroller’s office.

For more information about sales and use tax exemptions for agricultural equipment, see Agricultural and Timber Exemptions.

Agricultural and Timber Exemptions – How to Claim

To claim the sales and use tax exemption on an OHV, the buyer must give the seller their agricultural and timber registration number and the appropriate exemption certificate when purchasing the OHV.

Additional Resources

98-805
(08/2020)

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