What proof let Texas vehicle buyers transfer title without paying tax twice after a dealer collected but failed to remit the tax?

Plain-English summary

The Texas Comptroller told a person helping vehicle buyers that they did not have to pay motor vehicle sales tax again when a licensed dealer collected the tax but failed to remit it or transfer the vehicles.

Payment to the licensed dealer satisfied each buyer's obligation. A copy of the sales invoice itemizing the tax was acceptable evidence, and the title could be transferred without another payment.

The Comptroller would pursue the dealership for the unremitted money.

What this means for you

Vehicle buyers

Keep an itemized sales invoice proving the dealer collected the tax.

County tax assessor-collectors and title services

The letter accepted that invoice as proof and authorized transfer without collecting tax again.

Motor vehicle dealers

Failure to remit customer tax exposed the dealership to agency collection; it did not invalidate a buyer's documented payment.

Common questions

Q: What proof was acceptable?

A: A copy of the sales invoice itemizing tax paid to the dealer.

Q: Did the buyer owe tax again?

A: No.

Q: Could title transfer?

A: Yes, without additional tax payment.

Q: Who would the Comptroller pursue?

A: The dealership.

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/9904411L

Original ruling text

April 27, 1999

Dear **:

Thank you for your request for motor vehicle sales tax information.

You are trying to help your customers transfer vehicles where the dealer
collected tax from the purchasers and did not transfer the vehicles or remit
the tax to the county tax assessor-collector. You ask what needs to be
presented to the assessor-collector's office to prevent tax from being due
again from the purchaser.

Response: Because motor vehicle dealers are now required to collect motor
vehicle sales tax from their customers, motor vehicle sales tax that was paid
to a licensed dealer by the purchaser will satisfy the purchaser's requirement
to pay the tax, even though the dealership did not get the tax remitted to the
assessor-collector's office. The titles may be transferred without additional
tax payment. A copy of the sales invoice itemizing tax will be acceptable
evidence of tax paid to the dealer. This office will pursue the tax from the
dealership.

If you have any questions, please do not hesitate to call me toll free at
1-800-531-5441, extension 34663. My direct number is 512/463-4663. You may
also write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Joan Hale
Tax Policy Division