STAR: State Automated Tax Research for the State of Texas

9309155L [Tax Type: Motor Vehicle] [Document Type: Letter/Memo]

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Texas Comptroller of Public Accounts STAR System

9309155L

September 10, 1993 ************** ************** ************** Dear **************: Thank you for sharing your thoughts about the recent legislation concerning automobile sellers who finance their sales. Earlier, you had asked, "Can I pay the sales tax up front at the time of registration?" The answer you received was "no." First, the new law only applies to dealers who finance their own sales. Any dealer who finances its sales must register and report the tax to the Comptroller. Having said that, there is no prohibition against paying all the tax at once. However, if this is done and the vehicle is repossessed there is no refund available to the dealer. As you may know, this office worked with the Texas Independent Automobile Dealers Association on this legislation. I believe it will result in better tax compliance than existed under the prior law. As far as dealers not registering their automobiles in 60 days, the incentive is that failure to do so will result in their owing tax on the full purchase price of the vehicle even if it is repossessed within the 60 days. You were also concerned that the new law would cause an accounting nightmare for dealers. Essentially, the law is like the sales tax act in that the dealers report tax on their receipts in the month received. This does not cause accounting problems for sales tax permit holders and, hopefully, will not cause any undue burdens on these type dealers. Finally, you were concerned about the enforcement of the law. This new law should be easier to enforce than the previous statute as applied to these type dealers, and we intend to see that it is fully enforced. Sincerely, Michael D. Doyle Director Tax Administration cc: Chuck Johnstone, Manager, Tax Administration

NOTE: Previous Accession Number(s) 9309L1257C04

ACCESSION NUMBER: 9309155L
SUPERSEDED: N
DOCUMENT TYPE: L
DATE: 1993-09-10
TAX TYPE: MOTOR VEHICLE