How did Texas historically tax vehicles bought or brought into Texas by military personnel?

Plain-English summary

Military status did not create a general Texas motor vehicle sales or use tax exemption.

Texas purchases drew a historical four-percent sales tax. Out-of-state vehicles brought to Texas by a resident, domiciliary, or business drew four-percent use tax, reduced by sales tax paid to another state.

A service member transferred to Texas on military orders could pay a historical $15 new-resident tax instead if the vehicle was already registered in that person's name and Texas was not the home of record.

What this means for you

Military orders, home of record, prior registration, purchase location, and tax paid elsewhere were distinct facts. Verify current state and federal rules.

Common questions

Q: Was military status alone an exemption?
A: No.

Q: When did the historical $15 amount apply?
A: For a qualifying transferee whose home of record was not Texas.

Citations and references

The letter cites no numbered statute or rule. All printed rates and amounts are historical.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/8104L0329B09

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.

April 24, 1981

Dear ***:

Thank you for your letter of April 17, 1981, requesting an explanation of our tax law as it relates to military personnel.

Our Statute does not exempt military personnel from motor vehicle sales or use tax. Therefore, they will owe sales or use tax if they purchase or register their vehicles in Texas. Basically the tax is as follows:

Every retail sale of a motor vehicle in Texas is subject to four percent motor vehicle sales tax. The tax is paid when the vehicle is titled and registered at the county tax office.

Any vehicle purchased outside Texas and brought into Texas for use on the hiway by a person who is either a resident, domiciled or doing business in Texas is subject to four percent motor vehicle use tax. This tax, like our sales tax, is paid at the county tax office. Any sales tax paid to another state may be used as credit against the use tax.

If a person brings a vehicle registered in his name when he is transferred to Texas on military ordrs, he may pay a $15 new resident use tax instead of the four percent use tax provided Texas is not his home of record. This tax like the sales tax is paid at the county tax office when the vehicle is titled and registered in Texas.

I'm enclosing a couple of general information brochures.

Please don't hesitate to call if you have any questions.

Respectfully yours,

Adina Harrel

Motor Vehicle Sales Tax Division