Is a booting fee charged to remove a boot from an illegally parked car taxable as part of a taxable motor vehicle parking service?

Subject

Booting Fee — Motor Vehicle Illegally Parked In Private Parking Garage

Plain-English summary

A company operates motor vehicle parking services in a high-rise garage in Texas. When a car is parked in an illegal space in the garage, the company's personnel attach a device to the front wheel that makes the vehicle immovable -- a "boot." The vehicle owner has to pay a parking violation fee, separate from and in addition to the regular parking fee charged for entry to the garage, to get the boot removed.

The company asked whether this parking violation (booting) fee is taxable as part of a taxable parking service. The Comptroller's answer: yes, the fee is taxable.

The reasoning relies on Section 3.315(a), which governs motor vehicle parking and storage and states that "[s]ales tax is due on parking and storage fees for a motor vehicle," giving impound fees as one of the listed examples. The Comptroller concluded that booting a car parked in an illegal space "constitutes impoundment" -- so the booting fee is really an impound fee, and impound fees are taxable under the rule.

The letter notes this opinion is based on the facts presented and could change if the facts were different.

What this means for you

Parking garage and lot operators

If your garage or lot boots illegally parked vehicles and charges a separate violation fee to remove the boot, this ruling treats that fee the same as your regular parking charge for sales tax purposes -- it's taxable. The Comptroller characterizes booting as a form of impoundment, and impound fees are specifically called out as taxable under Section 3.315(a).

Accountants and tax professionals advising parking operators

When reviewing a parking operator's fee schedule for sales tax compliance, treat booting/violation fees as taxable parking and storage charges, not as a separate nontaxable penalty or service charge. The rationale here is that booting functions as impoundment, which Section 3.315(a) lists as an example of a taxable parking/storage fee.

Vehicle owners and drivers

If your car is booted for parking illegally in a private garage and you have to pay a fee to get it removed, this ruling confirms Texas sales tax applies to that fee, just as it applies to the garage's regular parking charge.

Common questions

Q: Is a booting fee (parking violation fee) taxable in Texas?
A: Yes. The Comptroller ruled that the fee is taxable because booting a vehicle parked in an illegal space constitutes impoundment, and Section 3.315(a) lists impound fees as an example of taxable parking and storage fees.

Q: Is the booting fee taxed separately from the regular parking fee, or under the same rule?
A: Both are taxed under the same rule -- Section 3.315(a), which taxes parking and storage fees for a motor vehicle, including impound fees.

Q: Why does booting count as "impoundment"?
A: The ruling states plainly that "[t]he booting of a motor vehicle when the owner parks the vehicle in an illegal space constitutes impoundment," without further elaboration.

Q: Could this outcome change under different facts?
A: Yes -- the letter explicitly states the opinion is based on the facts presented, and the opinion may change if there are additional or different facts.

Citations and references

Rules:

• Section 3.315(a) (motor vehicle parking and storage; sales tax due on parking and storage fees, including impound fees)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9611L1436B02

Original ruling text

November 8, 1996

Dear ***:

Thank you for your letter of October 29, 1996, asking about your client's
Texas sales and use tax responsibilities.

Your client provides motor vehicle parking services in a high-rise garage
in Texas. When cars park in illegal spaces in the parking garage, the car
may be "booted," or made immovable, by the attachment of a device to the
front wheel of the vehicle by your client's personnel. The boot is removed
after the vehicle owner pays a parking violation. The fee is in addition
to the parking fee which is charged for entry to the garage.

Question: Is the parking violation fee subject to tax as part of taxable
parking service?

Answer: Yes, the fee is taxable. Section 3.315(a) concerning motor vehicle
parking and storage states: "[s]ales tax is due on parking and storage fees
for a motor vehicle. Examples include parking meters, either private or
municipally owned, fees, decals and permits for parking or storage in any
lots or garages, including impound fees." (Emphasis added.) The booting
of a motor vehicle when the owner parks the vehicle in an illegal space
constitutes impoundment.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

You may call me toll free 1-800-531-5441, extension 3-4683. The direct line
is 512/463-4683. You may also write to Tax Policy Division, Comptroller of
Public Accounts.

Sincerely,

Eddie C. Washington
Tax Policy Division

NOTE: Previous Accession Number 9611681L