taxes

Motor Vehicle Tax Guide

Penalty on Late Tax Payment

Unless an exception applies, a purchaser or operator is required to pay the motor vehicle tax by the 30th day after the delivery date that the purchaser takes possession of the motor vehicle or the date the operator brought the motor vehicle into Texas for highway use.

All dealers licensed by the Texas Department of Motor Vehicles (TxDMV) must collect motor vehicle sales tax on taxable sales. Exceptions occur to a licensed dealer’s collection responsibilities when the gross weight of the motor vehicle is more than 11,000 pounds or when the motor vehicle is a non-titled trailer.

Dealers licensed by TxDMV must remit the motor vehicle tax to the CTAC within 30 days. Dealers remit taxes collected on seller-financed sales directly to the Comptroller’s office.

If the seller is not a dealer licensed by TxDMV, it is the purchaser’s responsibility to title and register the vehicle and pay motor vehicle tax to the county tax assessor-collector (CTAC).

Failure to Remit Tax by Texas Licensed Dealers

A purchaser who properly pays the tax to a dealer licensed by TxDMV will not be held liable for tax due if the dealer fails to transfer title and remit the tax. The purchaser must provide acceptable documentation that the purchaser paid the tax to the dealer. Acceptable documentation includes a dealer’s invoice or sales contract that itemizes the tax paid to the dealer.

Deadline Exception for Active Duty Military

Active duty military members, including the National Guard and reserve units, have 60 days from the date of Texas purchase or first use in Texas to transfer title and pay registration fees on the private-party purchase of a used motor vehicle.

The Comptroller, by rule, has set the tax payment due date as the same 60-day time period for active duty military members, including the National Guard and reserve units, rather than within 30 days of the purchase or first use in Texas. When standard presumptive value (SPV) procedures apply to the private-party purchase of a used motor vehicle by active duty military, a certified appraisal obtained within the same 60-day time period will be accepted.

Penalty for Late Payment by Purchaser, Operator or Dealer

The CTAC will assess a 5 percent penalty if the purchaser, operator or licensed dealer does not remit the motor vehicle tax by the 30th day (or within 60 days of purchase for active-duty military personnel). If the payment is not remitted within another 30 days of its original due date, the CTAC will assess another 5 percent penalty, for a total of 10 percent. The penalty is based on the amount of motor vehicle tax due and applies to any motor vehicle, including those unregistered and untitled, on which the responsible party did not timely pay the tax. The minimum amount of penalty is $1. Penalty remains due even if the delay is beyond the control of the purchaser, operator or dealer.

If you have questions about assessment of motor vehicle tax penalty, contact the Comptroller’s office.

Penalty Exceptions

Penalties are not imposed on exempt transfer, new resident tax, even trade transfer or gift tax transactions.

Documents for Proof of Delivery Date

"Delivery date" normally refers to the date the purchaser takes possession of the motor vehicle. Documentation for proof of that date include the date on the Manufacturer’s Certificate of Origin (MCO) assigned to a new motor vehicle, the date the title is assigned on a used motor vehicle or the date the Form 130-U, Application for Texas Title and/or Registration (PDF), is executed on a motor vehicle for which no title is required. The sale date indicated on the Texas Motor Vehicle Transfer Notification may also be used.

The date a vehicle is brought into Texas is verified by a document showing the delivery date in Texas or a document dated in Texas. Acceptable documents include a weight certificate, identification certificate, customs import document or state inspection document.

Penalty Schedule Example

DATE	EVENT
September 1	Delivery date or date brought into Texas
September 2	1st day of 30 days
September 30	Due date (30 days from delivery date)
October 1	5 percent penalty due
October 30	30th day from due date
October 31	Additional 5 percent penalty due (31st day from due date)

96-254
(09/2021)