What Texas motor vehicle use tax applied to a vehicle purchased overseas and later brought into Texas?

Plain-English summary

The Texas Comptroller said a vehicle purchased outside the state and then operated in Texas was generally subject to Texas motor vehicle use tax on its purchase price. The letter applied that rule to Texas residents, including military personnel whose home of record was Texas, and said no local tax applied to motor vehicle purchases.

A person qualifying as a new Texas resident could instead pay the reduced new-resident use tax described in the letter. The applicant had to be a new resident, and the vehicle had to have been permanently registered to that person in another state or foreign country. The quoted tax and fee amounts date from 2000.

What this means for you

Overseas vehicle purchasers

Where the vehicle was bought did not by itself avoid Texas use tax when a Texas resident brought it into the state for operation.

New residents and military personnel

The reduced treatment depended on both residency status and prior permanent registration. Texas home-of-record military personnel were treated as Texas residents under this letter.

Common questions

Q: Did Texas impose local motor vehicle tax?

A: The letter said no local tax was imposed on motor vehicle purchases.

Q: What prior registration was required for new-resident treatment?

A: Permanent registration to the applicant in another state or foreign country.

Citations and references

• The letter refers generally to the Tax Code without citing a section number.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/200007516L

Original ruling text

Date: July 20, 2000

From: Irene Cage
To: **
Subject: MV purchased overseas

Dear **:

Thank you for your e-mail concerning the taxability of a vehicle purchased
overseas and then brought into this state.

The Tax Code imposes a use tax on a motor vehicle purchased out of state and
then operated in Texas. Generally, a 6 1/4% state tax is due calculated on your
purchase price. There is no local tax imposed on motor vehicle purchases. This
is the appropriate tax for purchases by Texas residents including military
personnel with Texas as the home of record.

A new resident to Texas may qualify for a $90 new resident use tax in lieu of
the 6 1/4%. In order to qualify for the new resident provision the title
applicant must be a new resident to Texas and the vehicle must have been
registered (permanent registration) to that person in another state or foreign
country.

Registration fees vary by age of the passenger vehicle and the county in which
it is registered. Generally, registration fees are approximately $80. There
is also a $13. title application fee.

This opinion is based on the information presented. If there are additional or
different facts, the opinion could change.

If you have any questions, please do not hesitate to call me toll free at
1-800-531-5441, extension 3-2995. The direct number is 512/463-2995. The
e-mail address is .

Sincerely,

Irene Cage
Tax Policy Division