| Effective October 1, 2006, House Bill 4
changed Texas sales tax law concerning the sales of used motor vehicles.
This change applies to all used vehicles purchased for use in Texas --
whether the purchase is made in or out of Texas.
The tax rate didn't change, but the base is no longer the stated
sales price. Now the county tax assessor-collector will determine the
tax due based on a Standard Presumptive Value (SPV), using the following
guidelines:
- purchase price of the used vehicle (purchase price is greater than
or equal to 80% of the SPV)
- 80% of SPV (purchase price is less than 80% of SPV)
- appraised value (purchase price is less than 80% of SPV and
purchaser provides a certified appraisal)
A certified appraisal can be obtained either from a licensed Texas
motor vehicle dealer (for a fee set by the Texas State
Comptroller), or from a licensed insurance adjuster (for a fee to
be determined by the adjuster). The certified appraisal must be obtained
on a Comptroller-prescribed form within 20 days of purchase or of
bringing the vehicle into Texas.
There are a few exceptions to SPV, including gifts, antique vehicles,
and sales resulting from M&M liens. Check here for more information:
http://www.window.state.tx.us/taxinfo/taxpnw/tpn2006/tpn606.html.
Bottom line: it's probably going to cost more for some Texans to buy a
used vehicle, if not in taxes, at least in fees.
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