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Ezel / Tax Rulings / TX
TX 9902141L Motor Vehicle Tax 1999-02-04

What records did a Texas selling dealer need to keep when a lessor, rental company, or dealer claimed a retired-vehicle fair market value deduction?

Short answer: Section 152.063 required the sales invoice, payment instrument or cash receipt, and receipt for the title application and motor vehicle sales tax. No statute or formal rule required more, but the Comptroller asked the dealer to keep the purchaser's written fair-market-value instruction identifying the retired vehicle and VIN.

Apply this to your situation

This page answers the general question as of 1999. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1999
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 the specific recordkeeping question presented. It dates from 1999, predates modern Private Letter Ruling reliance terms, and cannot be treated by unrelated taxpayers as binding protection. Section 152.063, fair-market-value deduction rules, dealer-liability standards, and required records 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 separated legally required dealer records from an additional document the agency asked dealers to retain when a purchaser claimed a retired-vehicle fair market value deduction.

Section 152.063 required copies of:

  1. The sales invoice.
  2. The payment instrument or receipt for cash received.
  3. The receipt for the title application and motor vehicle sales tax.

The letter said no statute or formal rule required additional documentation. Even so, the Comptroller asked the dealer to keep the purchaser's—or documented agent's—written instruction stating the retired vehicle's fair market value and describing the vehicle, including its VIN.

Keeping that instruction would protect the selling dealer from liability for an invalid deduction. The person claiming the deduction would be liable instead.

What this means for you

Motor vehicle dealers

The agency-requested instruction went beyond the formal statutory records but served as liability protection for the selling dealer.

Vehicle lessors and rental companies

Provide a documented instruction that identifies the retired vehicle, its VIN, and the claimed fair market value.

Dealership accountants

Maintain both the ordinary sale/payment file and the claimant's deduction instruction.

Common questions

Q: What records did § 152.063 require?

A: The sales invoice, payment proof or cash receipt, and the title-application/motor-vehicle-tax receipt.

Q: Did a statute formally require the extra instruction?

A: No, according to the letter.

Q: What information should the instruction contain?

A: The claimed fair market value and a description of the retired vehicle, including its VIN.

Q: Who was liable for an invalid deduction if the dealer kept that instruction?

A: The person claiming the deduction.

Citations and references

  • Tex. Tax Code § 152.063

Source

Original ruling text

February 4, 1999

Dear Ms. **:

Thank you for your letter concerning records that a selling dealer should
maintain to document fair market value deduction taken by lessors, rental
companies and other dealers.

Records required in Section 152.063 of the Tax Code, include the a copy of the
sales invoice, a copy of payment instrument or receipt for cash received, and a
copy of the receipt for title application/motor vehicle sales tax. No
additional documentation is required by statute or formal rule. However, we
would ask that the dealer maintain a copy of the instruction instrument from
the purchaser or the purchaser's documented agent that indicates the fair
market value of the retired vehicle and the description of the vehicle
including its vehicle identification number. The dealer would then not be held
liable for an invalid fair market value deduction. The person claiming the
deduction will be liable.

Thank you for your patience. If you have any questions, please give me a call
at 463-4684.

Sincerely,

Curt Swenson
Tax Policy Division

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