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Ezel / Tax Rulings / TX
TX 7708L2015A08 Motor Vehicle Tax 1977-08-01

Did Texas tax digger equipment under limited sales tax or motor vehicle tax when attached to a truck chassis?

Short answer: It depended on the transaction. A digger sold for attachment to the customer's existing truck was tangible personal property subject to historical limited sales tax. If the seller attached it to a chassis and sold the combined unit, the whole unit was a motor vehicle. No tax was due when a licensed dealer bought the chassis and digger combination for resale.

Apply this to your situation

This page answers the general question as of 1977. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1977
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an August 1, 1977 taxpayer-response letter. STAR expressly warns that the four-percent rate is not current. Digger and accessory classification, installation timing, customer-owned chassis, combined-unit sales, dealer resale, limited sales tax, motor vehicle tax, seller collection, transfer forms, and registration may also have changed. The response addressed the transaction structures described, not every truck-mounted equipment sale. STAR documents may no longer represent current policy even when not marked superseded. Company details are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

A separate digger sold for a customer's truck was tangible personal property, while a seller-provided truck-and-digger combination was a motor vehicle.

When the company attached a digger to a chassis already owned by the customer, limited sales tax applied to the digger.

When the company attached the digger to a chassis and sold the complete unit, historical motor vehicle tax applied. A licensed motor vehicle dealer could buy a new or used chassis with the digger attached tax free when holding the combined unit for resale.

The purchaser normally paid motor vehicle tax to the county collector at transfer and registration. The seller supplied transfer forms and, if it collected tax as a customer service, had to report it to the collector.

What this means for you

Ownership of the chassis and whether the seller transferred a completed vehicle determined which historical tax applied.

Common questions

Q: What if the customer already owned the chassis?
A: Limited sales tax applied to the digger.

Q: What if the seller sold the complete truck-and-digger unit?
A: Motor vehicle tax applied.

Q: What if a licensed dealer held the combined unit for resale?
A: No tax was due on that acquisition.

Citations and references

  • No statute or rule was cited in the letter.

Source

Original ruling text

ALERT: The tax rates cited in this article are no longer the current motor vehicle sales tax
or motor vehicle rental tax rates.

COMPTROLLER OF PUBLIC ACCOUNTS

STATE OF TEXAS

AUSTIN, TEXAS 78774

August 1, 1977

Dear ***:

Digger equipment is considered tangible personal property subject to the Limited Sales, Excise and Use Tax.

When a digger unit is sold by COMPANY ABC and attached to a truck chassis that is owned by a customer, the digger is subject to Limited Sales Tax.

When a digger unit is attached to a truck chassis and the combined unit is sold by COMPANY ABC, the complete unit is considered a motor vehicle and is subject to the 4% Motor Vehicle Tax.

Tax is not due on a digger unit attached to a new or used truck chassis which has been purchased by a licensed motor vehicle dealer who holds the combined unit for resale.

A seller is not required to collect Motor Vehicle Tax, but must furnish the purchaser with all forms necessary for transfer. The purchaser is responsible for paying the tax to the County Tax Assessor-Collector at the time of transfer and registration. If the seller collects the tax as a customer service, he is responsible for reporting it to the Tax Assessor-Collector.

Any correspondence in this matter should be directed to the attention of the Motor Vehicle Sales Tax Division or call toll free 1-800-252-5555.

Yours very truly,

Richard Montgomery

Director

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