Could a Texas dealer charge a $50 documentary fee for handling title and registration, and when was the tax due?

Plain-English summary

The Texas Comptroller said state law allowed a dealer to charge a $50 documentary fee when the dealer handled the vehicle's title application and registration.

The same response said the dealer had to remit the tax within 20 days after the date of sale. After staff reviewed the situation, the Comptroller said the dealer had complied with the law.

The Comptroller also asked the manager of the Texas Performance Review Division to examine the tax-handling and due-date provision.

Both the fee amount and remittance deadline are quoted from a 1997 letter and should be treated as historical.

What this means for you

Motor vehicle dealers

The historical authority to charge the documentary fee depended on the dealer handling both the title application and registration.

Vehicle buyers

The letter treated the documentary fee separately from the tax the dealer had to remit.

Dealership accountants and title services

Do not use the 1997 amount or deadline without checking current requirements.

Common questions

Q: Could the dealer charge the $50 fee?

A: Yes, when the dealer handled the title application and registration.

Q: When did the tax have to be remitted?

A: Within 20 days after the sale under the law described in the letter.

Q: Did the Comptroller find a violation?

A: No. The response said the dealer had complied.

Citations and references

• The letter referred to state law but 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/9710974L

Original ruling text

October 15, 1997

Dear **:

I'd like to thank you for the kind words. It's always good to receive positive
feedback.

I asked my staff to look into this situation and it appears that **
has complied with the law. State law provides that a dealer may make the $50
documentary fee charge when they handle the title application and registration.
The law also provides that the tax must be remitted within 20 days from the
date of sale.

I've asked Andrea Cowen, Manager of my Texas Performance Review Division to
examine the tax handling and due date provision.

Again, thank you for your comments. If this office may ever be of assistance,
please feel free to contact one of my Tax Specialist. Our toll free phone
number is 1-800-252-5555.

Sincerely,

JOHN SHARP
Comptroller of Public Accounts