Does Texas sales tax apply to charges for storing a motor vehicle in a general-purpose storage facility?

Plain-English summary

The Comptroller's Tax Administration Division answered a question about whether sales tax applies to charges for storing items — including motor vehicles — in a storage facility.

Under Tax Code Section 151.0101(a)(4), motor vehicle parking and storage services are a taxable service. But the letter clarifies that this taxable-service rule does not apply to a general-purpose storage facility, meaning one where a customer can store any kind of property and the facility has no designated area set aside for parking or storing motor vehicles. The rule does apply to facilities that store motor vehicles specifically, whether the vehicles are parked and stored with the owner's consent or without it (for example, towed or impounded vehicles).

The bottom line from the letter: if a motor vehicle ends up being stored at what is otherwise a general-purpose storage facility, that specific charge for storing the vehicle is taxable, and the facility should collect sales tax on it — even though the facility's other, non-vehicle storage charges are not taxable.

The letter notes this opinion is based on the facts presented to the Comptroller's office, and that other, similar-seeming facts could lead to a different result.

What this means for you

Self-storage and mini-warehouse facility operators

If you operate a general-purpose storage facility (one that rents space for any kind of personal property, not just vehicles), your storage charges are generally not taxable as motor vehicle parking/storage services under Section 151.0101(a)(4) — as long as you don't have designated areas for parking or storing motor vehicles. But if a customer stores a car, truck, boat trailer, or other motor vehicle in your facility, that particular charge becomes taxable, and you need to collect sales tax on it.

Parking lot and garage operators

If your facility is set up specifically to park and store motor vehicles — whether by arrangement with the owner or through towing/impound — your charges are taxable under Section 151.0101(a)(4) regardless of whether you also call yourself a "storage facility."

Common questions

Q: Is a self-storage unit rental taxable in Texas?
A: Not under Section 151.0101(a)(4), as long as the facility is a general-purpose storage facility with no designated motor vehicle parking or storage areas and the customer isn't storing a motor vehicle there.

Q: What if a customer stores a car in a general storage unit?
A: That charge is taxable. The letter states that "if a motor vehicle is being stored in a general-purpose storage facility, the facility should charge applicable sales tax."

Q: Does it matter whether the vehicle owner consented to having the vehicle parked/stored there?
A: No. The letter says the taxable-service rule applies to motor vehicle storage facilities "where vehicles are parked and stored with or without the vehicle owner's consent."

Q: Can I rely on this letter for my own situation?
A: Only if your facts match. The letter itself cautions that "this opinion is based on the facts presented" and "other facts though similar may provide a different result."

Citations and references

Statutes and rules:

• Tax Code Section 151.0101(a)(4) (taxable services — motor vehicle parking and storage)

No other statutes or rules are cited in this letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9303977L

Original ruling text

March 15,1993

Dear **:

Thank you for your recent letter concerning the taxability of charges for items
placed in a storage facility.

Section 151.0101 (a)(4) does not apply to general-purpose storage facilities
where the customer is allowed to store any type of property as long as the
facility does not provide designated areas for motor vehicle parking or
storage. This section of the law does apply to motor vehicle storage facilities
where vehicles are parked and stored with or without the vehicle owner's
consent. Therefore, if a motor vehicle is being stored in a general-purpose
storage facility, the facility should charge applicable sales tax.

This opinion is based on the facts presented. Other facts though similar may
provide a different result.

If you have other questions or need more information, you may call me at
1-800-531-5441, extension 5-0148. The regular number is 512/463-4600. You may
also write to the Tax Administration Division at the above address.

Sincerely,

Anne Blanton
Tax Administration Division