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Ezel / Tax Rulings / TX
TX 9806564L Motor Vehicle Tax 1998-06-15

Did a Texas retailer collect limited sales tax on a utility trailer kit, or did the buyer pay motor vehicle tax when registering it?

Short answer: The retailer did not collect Chapter 151 limited sales tax. The trailer kit was subject to Chapter 152 motor vehicle tax, which the purchaser paid to the county tax assessor-collector when registering the completed trailer for highway use. The seller also had to provide the required seller-donor affidavit.

Apply this to your situation

This page answers the general question as of 1998. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1998
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller letter issued on a specific utility trailer kit. It dates from 1998, predates modern Private Letter Ruling reliance terms, and cannot be treated by unrelated taxpayers as binding protection. Trailer-kit definitions, seller affidavit forms, invoice statements, highway-registration rules, county procedures, and Chapters 151 and 152 may have changed, so verify current Texas law. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller classified a utility trailer kit under Chapter 152 motor vehicle tax rather than Chapter 151 limited sales tax.

The retailer should not collect limited sales and use tax. Instead, its invoice should state that Chapter 152 applied, and the purchaser paid motor vehicle tax to the county tax assessor-collector when registering the trailer for highway use.

As the motor vehicle seller, the retailer also had to give the purchaser a completed seller-donor affidavit.

What this means for you

Trailer kit retailers

The historical letter required a Chapter 152 invoice statement and the seller affidavit rather than Chapter 151 tax collection.

Utility trailer builders and buyers

The tax became payable during county registration for highway use.

County tax assessor-collectors

The purchaser, rather than the kit retailer, paid the motor vehicle tax at registration under the described procedure.

Common questions

Q: Did the retailer collect limited sales tax?

A: No.

Q: Which tax chapter applied?

A: Chapter 152 motor vehicle tax.

Q: When was tax paid?

A: When the purchaser registered the trailer for highway use.

Q: What document did the seller provide?

A: A completed seller-donor affidavit.

Citations and references

  • Texas Tax Code Chapters 151 and 152

Source

Original ruling text

June 15, 1998

Dear **:

Thank you for your letter dated June 10, 1998, concerning the taxability of a
utility trailer kit.

You are correct, ** or any other retailer of the trailer kit should
not collect limited sales and use tax on the sale of a trailer kit. A retailer
should indicate on their invoice that the trailer kit is subject to Chapter
152, Motor Vehicle Tax, not Chapter 151, Limited Sales Tax.

** as the seller of a motor vehicle is required to give the
purchaser a complete seller donor affidavit.

The trailer kits are subject to tax under the motor vehicle tax rather than the
limited sales tax. The motor vehicle tax will be paid to the county tax
assessor/collector at the time the purchaser registers the vehicle for highway
use.

Rules and other tax information are on the Comptroller's website,
.

This opinion is based on the information you submitted and current law. Other
information, though similar, may result in different answers.

If you have any questions or need more information, I'll be glad to help you.
Please call me toll free at 1-800-531-5441, extension 5-0330. The direct line
is 512/475-0330. You may also write to Tax Policy Division, Comptroller of
Public Accounts.

Sincerely,

Bettie Peterson
Tax Policy Division

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