taxes

Motor Vehicle Tax Guide

Public Agencies

A public agency means a department, commission, board, office, institution or other agency of the state of Texas or of a county, city, town, school district, hospital district, water district or other special district, authority or political subdivision created by or under the constitution or the statutes of this state, or an unincorporated agency or instrumentality of the United States.

The term includes

• any college or university created or authorized by the Texas constitution or Texas statutes;
• all independent boards, commissions, agencies, or corporations that are instrumentalities of the U.S. and are wholly owned by the U.S. or by another corporation wholly owned by the U.S., including organizations specifically exempted as an instrumentality of the U.S. by federal statute, such as a federal credit union, federal reserve bank, or federal home loan bank; and
• an open-enrollment charter school (granted a charter under Education Code, Chapter 12, Subchapter D).

An organization may receive federal or state funds and still not be entitled to an exemption from motor vehicle tax as a public agency.

Purchase or Lease of Motor Vehicles by a Public Agency or An Entity Exempted by Another Statute

The sale or use of a motor vehicle is exempt from motor vehicle tax, when the motor vehicle is purchased

• and used by a public agency, and
  • operated with an exempt license plate issued under Transportation Code Section 502.451, Exempt Vehicles; or
  • exempted from inscription requirements as provided by Transportation Code Sections 721.003, Exemption from Inscription Requirement for Certain State-Owned Motor Vehicles, or 721.005, Exemption from Inscription Requirement for Certain Municipal and County-Owned Motor Vehicles, regardless of whether the vehicle is operated with an exempt or regularly designed license plate; or
  • issued a regularly designed license plate, pursuant to Transportation Code Section 502.451(f), because the motor vehicle is dedicated to law enforcement activities.
• regardless of whether the motor vehicle is operated with exempt or regularly designed license plates, by
  • the federal government, its agencies, and its instrumentalities; or
  • an entity who is exempted from the taxes imposed by Tax Code Chapter 152, or by another Texas or federal statute.
• to be leased to a public agency, including the federal government, its agencies, and its instrumentalities; and operated with an exempt license plate issued under Transportation Code Section 502.451.

To claim an exemption as a public agency, the title applicant should indicate "public agency" in Box 38 of Form 130-U, Application for Texas Title and/or Registration (PDF) and list the appropriate statutory reference for this exemption: Tax Code Section 152.082, Sale to a Public Agency, or Section 152.083, Lease to a Public Agency.

96-254
(09/2021)