Motor Vehicle Tax Guide

Child Care Facilities

Qualifying Residential Child Care Facilities

Motor vehicles purchased, used or rented by a qualified residential child care facility and used primarily to transport children residing at the facility are exempt from motor vehicle tax.

Not all child care facilities are exempt from motor vehicle tax. A qualifying residential child care facility is a facility that is licensed under Human Resources Code Chapter 42 to provide residential care 24 hours a day and provides this care

in a single residential group;
to children who do not require specialized services or treatment; and
to children who are emotionally disturbed.

Non-Qualifying Child Care Facilities

Motor vehicles purchased by day care centers, group day care centers, registered family homes or those residential child care facilities that do not provide 24-hour care are not exempt from motor vehicle tax.

The exemption does not apply to motor vehicles purchased by facilities that are issued a verification certificate from a licensed Department of Family and Protective Services (DFPS) child-placing agency and not a license directly from DFPS. These facility types include agency foster homes, agency foster group homes, Child Protective Services (CPS) foster homes, CPS foster group homes and CPS adoptive homes. A child-placing agency that only places children in its verified facilities does not qualify, since the agency is not directly providing the child care.

A few other state agencies, such as the Texas Department of State Health Services’ youth camps, can license facilities that provide 24-hour care. These facilities do not qualify for the motor vehicle tax exemption since they are not under Human Resources Code Chapter 42 and do not receive a DFPS license. Some of these facilities may qualify for the public agency exemption from motor vehicle tax, depending on the facility’s ownership.

License

The DFPS issues licenses to qualifying residential child care facilities under Human Resources Code Chapter 42. Each license indicates the type of licensed facility and includes a permit number. The license does not have an ending or renewal date. The DFPS may revoke a license at any time.

The DFPS license means the facility has the capacity to serve both children who do not require specialized services or treatment and children who are emotionally disturbed. For the motor vehicle tax exemption, the DFPS license will state one of the following types of qualifying residential child care facility:

independent foster group home
independent foster family home
institution providing basic care
institution serving intellectual or developmental disabilities
emergency shelter
residential treatment center
therapeutic camp
child-placing agency that directly provides residential child care

Application

To claim exemption as a qualified residential child care facility, the title applicant should indicate "qualified residential child care facility" in Box 38 of Form 130-U, Application for Texas Title and/or Registration (PDF), and list the statutory reference for this exemption, Tax Code Section 152.093, Motor Vehicle Sold to Certain Licensed Child-Care Facilities.

The county tax assessor-collector (CTAC) can request to see the DFPS license. To be sure that a license is active, and has not been revoked, the CTAC can access the DFPS database of residential child care license holders.

The CTAC can also request that the facility provide their contact person and phone number for the local DFPS licensing office if the CTAC has any additional questions. The local licensing office, and not the DFPS state headquarters, has the capability to respond to any verification questions.

96-254
(09/2021)

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