What motor vehicle tax changes did Texas announce in 1993 for seller-financed sales, EMS vehicles, and mobile offices?

Plain-English summary

This Texas Comptroller notice summarized three motor vehicle tax changes from the 73rd Legislature.

House Bill 995 required licensed dealers financing their own sales to obtain a seller-financed sales tax permit, collect tax as customer payments arrived, file returns, and timely transfer title. Separately stated interest was excluded. A title not transferred within 60 days triggered tax on the full sales price under the notice.

House Bill 895 expanded the exemption for emergency medical service vehicles sold to nonprofit EMS providers licensed by the Texas Board of Health.

Senate Bill 892 moved trailers designed as offices, sales outlets, or workplaces to limited sales tax treatment effective October 1, 1993.

All stated rates, forms, filing cycles, deadlines, and administrative procedures are historical.

What this means for you

Seller-financing dealers

The notice is useful background for 1993-era letters but not a current compliance checklist.

Nonprofit EMS providers and mobile-office sellers

The entity, licensing, vehicle, and trailer rules announced here require current-law verification.

Common questions

Q: Which bill changed seller-financed sales?

A: House Bill 995.

Q: Which bill expanded the EMS exemption?

A: House Bill 895.

Q: Which bill changed mobile-office taxation?

A: Senate Bill 892.

Citations and references

• Texas House Bills 995 and 895, 73rd Legislature.
• Texas Senate Bill 892, 73rd Legislature.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/9308L1258G11

Original ruling text

Motor Vehicle Sales Tax Legislative Changes

The 73rd Legislature recently changed the way tax is paid on certain
motor vehicle sales. You may be affected, especially if you finance
vehicles that you sell. Please review the changes described below. Be
sure to submit the enclosed permit application if you qualify.

Seller Financed Sales HB 995

Seller Must Collect Tax

Motor vehicle sellers who hold a dealer license from the Texas
Department of Transportation and finance the vehicles they sell will
be required to collect tax on those sales. Sellers who use third-party
lenders or sell only for resale will not be affected. Tax will
continue to be paid to the County Tax Assessor-Collector on
third-party-financed sales and cash sales.

Collecting the Tax

Regardless of the accounting method of the seller, tax should be
collected as the seller receives the payments. The tax is based on the
amount of the payment. The seller will be liable only for tax on the
payments received. Separately stated interest is not part of the
taxable value. The tax rate is 6 1/4%.

Obtaining a Tax Permit--Remitting the Tax

All dealers who finance their sales must obtain a Motor Vehicle Seller
Financed Sales Tax Permit. The seller will be required to file a return
and remit the proper tax to the Comptroller. Initially, returns will be
filed quarterly. The due date will be on the 20th of the month following
the end of the report period. If you finance vehicles which you sell,
please complete the enclosed application and return it to this office.
There is no bond required to obtain the permit.

Transferring Title

The Application for Texas Certificate of Title/Tax Statement(Form
130-U) should be completed indicating the sales price and any trade-in
but, instead of paying the tax to the County Tax Assessor-Collector,
show your tax permit number in the tax section of the form (Block 21).
The due date for filing the title application did not change. If the
title is not transferred within 60 days from the date of the sale, the
tax will be due on the entire sales price (not just the receipts
received) and must be remitted on the next return.

Effective Date
This change for seller-financed sales is effective on all
seller-financed sales which occur on or after October l, 1993. Sales
made prior to that date are not affected.

Other Topics

l. Complete records must be retained on all sales. Sales for resale
must be documented with a resale certificate. Administrative rules on
these and other issues are being drafted.

The Comptroller will be participating in seminars sponsored by the
Texas Independent Automobile Dealers Association (TIADA). The
association is contacting all dealers. If you have any questions
concerning the seminars, you may call TIADA toll free at
1-800-442-5944.

Emergency Medical Service Vehicles HB 895

The exemption for Emergency Medical Service (EMS) vehicles was
expanded. Sales of EMS vehicles to nonprofit EMS providers licensed by
the Texas Board of Health are exempt from motor vehicle sales tax.
This change is effective September 1,1993.

Mobile Offices - SB 892

Effective October 1, 1993, the sale or rental of trailers designed to
be used as an office, sales outlet or other workplace will be subject
to Limited Sales Tax. This makes the taxability of these units
consistent with portable buildings. You will need a limited sales tax
permit if you do not already have one.

Need More Information?

Please call our Tax Assistance Section if you have any questions. The
toll free number for motor vehicle tax questions is 1-800-252-1382. If
you have any questions on mobile offices or other limited sales tax
questions, call 1-800-252-5555. From a telecommunication device for
the deaf (TDD) only, call 1-800248-4099. In Austin, the local TDD
number is 463-4671.

NOTE: Previous Accession Number 93070181L.2 and/or 9307181L