bill ending sales tax on private used car sales

The text as introduced · 824 words

89R4126 SRA-D

By: Shaheen
H.B. No. 4300

A BILL TO BE ENTITLED

AN ACT

relating to the exemption of certain motor vehicle sales, gifts,

and exchanges from motor vehicle sales and use taxes.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 152.001(1) and (2), Tax Code, are

amended to read as follows:

(1) "Sale" :

(A) includes:

(i) [ (A) ] an installment and credit sale;

(ii) [ (B) ] an exchange of property for

property or money , other than an exchange described by Paragraph

(B)(i) ;

(iii) [ (C) ] an exchange in which property

is transferred but the seller retains title as security for payment

of the purchase price;

(iv) [ (D) ] a transaction in which a motor

vehicle is transferred to another person without payment of

consideration , other than a transaction described by Paragraph

(B)(ii) [ and that does not qualify as a gift under Section 152.025 ];

and

(v) [ (E) ] any other closed transaction that

constitutes a sale ; and

(B) does not include:

(i) the even exchange of two motor

vehicles; and

(ii) the gift of a motor vehicle .

(2) "Retail sale" means a sale of a motor vehicle

except:

(A) the sale of a new motor vehicle in which the

purchaser is a franchised dealer who is authorized by law and by

franchise agreement to offer the vehicle for sale as a new motor

vehicle and who acquires the vehicle either for the exclusive

purpose of sale in the manner provided by law or for purposes

allowed under Chapter 503, Transportation Code;

(B) the sale of a vehicle other than a new motor

vehicle in which the purchaser is a dealer who holds a dealer's

general distinguishing number issued under Chapter 503,

Transportation Code, and who acquires the vehicle either for the

exclusive purpose of resale in the manner provided by law or for

purposes allowed under Chapter 503, Transportation Code;

(C) the sale to a franchised dealer of a new motor

vehicle removed from the franchised dealer's inventory for the

purpose of entering into a contract to lease the vehicle to another

person if, immediately after executing the lease contract, the

franchised dealer transfers title of the vehicle and assigns the

lease contract to the lessor of the vehicle; [ or ]

(D) the sale of a new motor vehicle in which the

purchaser is a manufacturer or distributor as those terms are

defined by Section 2301.002, Occupations Code, who acquires the

motor vehicle either for the exclusive purpose of sale in the manner

provided by law or for purposes allowed under Section 503.064,

Transportation Code ; or

(E) the sale of a used motor vehicle from one

individual to another individual, provided that the sale takes

place in this state and the seller is not acting as a motor vehicle

dealer under Subchapter B, Chapter 503, Transportation Code, in

relation to the sale .

SECTION 2. Section 152.041(a), Tax Code, is amended to read

as follows:

(a) The tax assessor-collector of the county in which an

application for registration or for a Texas certificate of title is

made shall collect taxes imposed by this chapter[ , subject to

Section 152.0412, ] unless another person is required by this

chapter to collect the taxes.

SECTION 3. Sections 152.062(b) and (c), Tax Code, are

amended to read as follows:

(b) The statement must be [ in the following form:

[ (1) if a motor vehicle is sold, the seller and

purchaser shall make ] a joint statement by the seller and purchaser

of the then value in dollars of the total consideration for the

vehicle[ ;

[ (2) if the ownership of a motor vehicle is

transferred as the result of an even exchange, the principal

parties shall make a joint statement describing the nature of the

transaction; or

[ (3) if the ownership of a motor vehicle is

transferred as the result of a gift, the principal parties shall

make a joint statement describing the nature of the transaction and

the relationship between the principal parties ].

(c) If a party to a sale[ , even exchange, or gift ] is a

corporation, the president, vice-president, secretary, manager, or

other authorized officer of the corporation shall make the

statement for the corporation.

SECTION 4. The following provisions of the Tax Code are

repealed:

(1) Section 152.002(f);

(2) Section 152.024;

(3) Section 152.025;

(4) Section 152.0412;

(5) Sections 152.062(b-1) and (b-2); and

(6) Section 152.1222.

SECTION 5. The changes in law made by this Act do not affect

tax liability accruing before the effective date of this Act. That

liability continues in effect as if this Act had not been enacted,

and the former law is continued in effect for the collection of

taxes due and for civil and criminal enforcement of the liability

for those taxes.

SECTION 6. This Act takes effect September 1, 2025.