Is a Texas economic development corporation exempt from motor vehicle sales tax because it has other state sales-tax exemptions?

Plain-English summary

The Texas Comptroller told the Grayson County Tax Assessor-Collector that an economic development corporation was not exempt from motor vehicle sales tax.

The Development Corporation Act did not make the corporation a political subdivision or exempt it from all state taxes. Although Tax Code § 151.341(a) specifically exempted these entities from state limited sales tax, the Legislature included no matching exemption in the motor vehicle tax chapter.

What this means for you

Economic development corporations

An exemption under one tax chapter does not automatically carry into another. Confirm a specific Chapter 152 exemption before treating a vehicle purchase as tax-free.

County tax offices

The entity's public-development mission and Chapter 151 exemption were insufficient. The Comptroller directed motor vehicle tax treatment because no Chapter 152 provision applied.

Common questions

Q: Was the corporation exempt from some Texas tax?

A: Yes, the letter identified a state limited sales-tax exemption under § 151.341(a).

Q: Why did motor vehicle tax still apply?

A: The motor vehicle tax chapter did not contain a comparable exemption, and the corporation was not a political subdivision.

Citations and references

• Tex. Loc. Gov't Code § 501.055(b)
• Tex. Tax Code § 151.341(a)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/200806292L

Original ruling text

From: Curt Swenson
Sent: Thursday, June 26, 2008 11:47 AM
To: **
Cc: Lavonne Key; Sun Down Hunter; John Huffman; Robin Corrigan
Subject: **

Grayson County Tax Assessor-Collector

**:

Although Economic Development Corporations are exempt from some taxes,
including state limited sales tax, they are not exempt from motor vehicle sales
tax. The Development Corporation Act does not give them the status of a
political subdivision or provide that they are exempt from all state taxes. See
Loc. Gov’t Code Sec. 501.055(b). Further, the Texas Legislature specifically
exempted these organizations from state limited sales tax in Section 151.341(a)
of the Tax Code. The Legislature made no such provision in the motor vehicle
chapter of the code.

It was good to talk with you, although briefly.

Thanks,

Curt Swenson
Tax Policy Division
Comptroller of Public Accounts