Did a Texas-resident servicemember owe Texas vehicle tax when registering an out-of-state purchase in Texas?

Plain-English summary

The Texas Comptroller said a servicemember who remained a Texas resident owed Texas motor vehicle tax when registering in Texas a vehicle purchased while stationed outside the state.

Texas would credit sales tax paid on the vehicle to another state. The letter found no way to register an otherwise nonexempt, previously untaxed vehicle without paying Texas tax.

The letter contrasted the Texas resident with a new resident and quoted a historical $15 new-resident tax. STAR now expressly warns that this amount and the cited tax rates are no longer current.

What this means for you

Military service members

Being stationed outside Texas did not by itself make the Texas resident in the letter a new resident or exempt the vehicle from tax.

Registration staff and accountants

The letter allowed credit for sales tax paid to another state, but its dollar amount for new residents is obsolete.

Common questions

Q: Did the servicemember owe Texas tax when registering the vehicle?

A: Yes, because the person remained a Texas resident.

Q: Was tax paid to another state ignored?

A: No. Texas would give credit for that sales tax.

Q: Is the letter's $15 new-resident amount current?

A: No. STAR expressly says it is no longer current.

Citations and references

• The letter did not identify a statute or administrative rule by number.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/9704350L

Original ruling text

ALERT: The tax rates (including the New Resident rate) cited in this article are no longer the current motor vehicle sales tax or motor vehicle rental tax rates.

April 24, 1997

Dear ***:

On April 21, 1997, you asked two questions concerning the registration of a
motor vehicle in this state by a serviceman who is a resident of Texas but is
stationed outside Texas where he purchased a vehicle. The questions in
reference to your letter were as follows:

1. Would Texas allow the serviceman to register a motor vehicle in Texas
   without the payment of the motor vehicle sales and use tax?
   Answer: As a resident, the serviceman would be required to pay the motor
   vehicle tax on the vehicle if it was registered in Texas. We would give credit
   for any sales tax the serviceman paid on the purchase of the vehicle in another
   state.
2. Are there any circumstances where a vehicle, which has not been taxed
   elsewhere, can be registered in your state without payment of tax, assuming
   that the purchaser is not an exempt entity?
   Answer: No. However, if the person registering the vehicle is a new resident
   (as opposed to the serviceman in your example), the tax is only $15.
   I hope this satisfactorily answers your questions. Please feel free to call me
   at 1-800-531-5441, extension 3-4004 should you have further questions.
   Sincerely,
   Wade Anderson
   Director, Tax Policy