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Ezel / Tax Rulings / TX
TX 7711L2015E12 Motor Vehicle Tax 1977-11-18

Could tax paid to a foreign country reduce Texas use tax on a vehicle bought abroad and brought into Texas?

Short answer: No. Texas granted credit for sales or use tax paid to another U.S. state on the same vehicle, but not for tax paid to a foreign country. The historical Texas use tax applied to a foreign or domestic vehicle bought outside Texas and brought for highway use by a Texas resident or business, using purchase price without a deduction for use or depreciation.

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 a November 18, 1977 taxpayer-response letter. STAR expressly warns that the four-percent rate is not current. Use-tax nexus, Texas residency and business status, highway use, purchase-price valuation, depreciation, imports, treaties, foreign-country payments, other-state credits, refunds, and proof requirements may also have changed. The letter distinguishes another U.S. state from a foreign country but does not identify the country or tax involved. STAR documents may no longer represent current policy even when not marked superseded. Taxpayer 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

Tax paid to a foreign country did not reduce the historical Texas motor vehicle use tax.

The letter applied use tax to any foreign or domestic vehicle purchased outside Texas and brought into the state for public-highway use by a Texas resident or person doing business in Texas.

Tax was computed on purchase price without deducting prior use or depreciation. Credit was available for sales or use tax paid to another U.S. state on the same vehicle, but not for tax paid to a foreign country.

What this means for you

The historical credit depended on where the earlier tax was paid, not merely whether another jurisdiction had taxed the vehicle.

Common questions

Q: Did foreign-country tax qualify for credit?
A: No.

Q: Did another U.S. state's tax qualify?
A: Yes, on the same vehicle.

Q: Was depreciation deducted from the tax base?
A: No.

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

November 18, 1977

Dear ***,

Thank you for your request for motor vehicle tax refund.

Texas imposes a 4% use tax on any motor vehicle (foreign or domestic) purchased outside the state and brought into Texas for use upon the public highways by any Texas resident or any person doing business in Texas. The tax is computed on the purchase price with no deduction for use or depreciation.

Credit is granted for sales or use tax paid to another state on the same vehicle. However, credit is not allowed for taxes paid to a foreign country.

If you have any questions you may write the Motor Vehicle Sales Tax Division or call toll free, 1-800-252-5555.

Yours very truly,

Richard Montgomery, Director

Motor Vehicle Sales Tax Division

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