H.B. No. 995
1-1 AN ACT
1-2 relating to the collection and disposition of the motor vehicle
1-3 sales tax on a motor vehicle sold using seller financing.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 152.001, Tax Code, is amended by adding
1-6 Subdivision (16) to read as follows:
1-7 (16) "Seller-financed sale" means a retail sale of a
1-8 motor vehicle by a dealer licensed under Article 6686, Revised
1-9 Statutes, in which the seller collects all or part of the total
1-10 consideration in periodic payments and retains a lien on the motor
1-11 vehicle until all payments have been received. The term does not
1-12 include a:
1-13 (A) retail sale of a motor vehicle in which a
1-14 person other than the seller provides the consideration for the
1-15 sale and retains a lien on the motor vehicle as collateral;
1-16 (B) lease; or
1-17 (C) rental.
1-18 SECTION 2. Section 152.021(a), Tax Code, is amended to read
1-19 as follows:
1-20 (a) A tax is imposed on every retail sale of every motor
1-21 vehicle sold in this state. Except as provided by Section 152.047,
1-22 the <The> tax is an obligation of and shall be paid by the
1-23 purchaser of the motor vehicle.
1-24 SECTION 3. Sections 152.041(b) and (c), Tax Code, are
2-1 amended to read as follows:
2-2 (b) Except as provided by Section 152.069, the <The> tax
2-3 assessor-collector may not accept an application unless the tax and
2-4 any penalty is paid.
2-5 (c) Except as provided by Section 152.047, the <The> tax
2-6 imposed by Section 152.021 of this code is due on the 20th working
2-7 day after the day that the motor vehicle is delivered to the
2-8 purchaser.
2-9 SECTION 4. Subchapter C, Chapter 152, Tax Code, is amended
2-10 by adding Sections 152.047 and 152.048 to read as follows:
2-11 Sec. 152.047. COLLECTION OF TAX ON SELLER-FINANCED SALE.
2-12 (a) Except as inconsistent with this chapter and rules adopted
2-13 under this chapter, the seller of a motor vehicle shall report and
2-14 pay the tax imposed on a seller-financed sale to the comptroller on
2-15 the seller's receipts from seller-financed sales in the same manner
2-16 as the sales tax is reported and paid by a retailer under Chapter
2-17 151.
2-18 (b) If a note, mortgage, account receivable, or other
2-19 document evidencing the purchaser's indebtedness to the seller of a
2-20 vehicle sold subject to a seller-financed sale does not bear
2-21 interest, it will be conclusively presumed that the total
2-22 consideration for the sale is principal.
2-23 (c) If a note, mortgage, account receivable, or other
2-24 document evidencing the purchaser's indebtedness to the seller of a
2-25 vehicle sold subject to a seller-financed sale bears interest, it
2-26 is conclusively presumed that interest accrues and is paid by the
2-27 purchaser on a straight line basis.
3-1 (d) The seller shall add the tax imposed on a
3-2 seller-financed sale to the sales price of the vehicle sold, and
3-3 when added, the tax is:
3-4 (1) a part of the sales price;
3-5 (2) a debt owed to the seller by the purchaser; and
3-6 (3) recoverable at law in the same manner as the sales
3-7 price.
3-8 (e) Regardless of the accounting method used by the seller,
3-9 the seller shall collect and pay the tax imposed on a
3-10 seller-financed sale to the comptroller as the seller receives the
3-11 proceeds of the sale.
3-12 (f) If the seller fails to apply, not later than the 60th
3-13 day after the date the motor vehicle is delivered to the purchaser,
3-14 for registration and a Texas certificate of title for a motor
3-15 vehicle sold in a seller-financed sale in accordance with Section
3-16 152.069, the seller is liable for all unpaid tax on the total
3-17 consideration, and the tax is due and must be sent to the
3-18 comptroller with the first report after the expiration of the
3-19 prescribed period.
3-20 (g) If a seller factors, assigns, or otherwise transfers the
3-21 right to receive payments, all unpaid tax is due on the total
3-22 consideration not reported at the time the agreement is factored,
3-23 assigned, or otherwise transferred. The seller shall report and
3-24 submit the tax in the report period in which the right to receive
3-25 the payment is factored, assigned, or otherwise transferred. The
3-26 seller may not take a deduction in the amount of tax due if a
3-27 transfer at a discount is made.
4-1 (h) The comptroller may proceed against the purchaser in a
4-2 seller-financed sale for the amount of any tax not paid by the
4-3 purchaser.
4-4 (i) The comptroller shall adopt rules and promulgate forms
4-5 necessary to implement this section.
4-6 Sec. 152.048. GROSS RECEIPTS PRESUMED SUBJECT TO TAX. (a)
4-7 All gross receipts of a seller required to obtain a permit under
4-8 Section 152.065 are presumed to be subject to the provisions of
4-9 this code.
4-10 (b) The presumption provided by Subsection (a) does not
4-11 apply to receipts:
4-12 (1) on which a tax imposed under other law is computed
4-13 and paid to the comptroller; or
4-14 (2) for which a properly completed resale or exemption
4-15 certificate is accepted by the seller.
4-16 (c) The seller may overcome the presumption under Subsection
4-17 (a) by credible evidence that the receipts are not from a
4-18 seller-financed sale or that the tax on those receipts has been
4-19 sent to the comptroller.
4-20 SECTION 5. Subchapter D, Chapter 152, Tax Code, is amended
4-21 by adding Section 152.0635 to read as follows:
4-22 Sec. 152.0635. RECORDS OF CERTAIN SELLERS. (a) In addition
4-23 to the requirements prescribed by Section 152.063, a seller engaged
4-24 in seller-financed sales who has a permit under Section 152.065
4-25 shall keep the records required by this section.
4-26 (b) For seller-financed sales, the seller shall keep at the
4-27 seller's principal office for at least four years from the date on
5-1 which the seller receives the final payment for the motor vehicle:
5-2 (1) the lienholder's copy of the receipt for title
5-3 application, registration, and motor vehicle tax issued by a county
5-4 tax assessor-collector; and
5-5 (2) a ledger or other document containing a complete
5-6 record of the payment history for that motor vehicle, including:
5-7 (A) the name and address of the purchaser;
5-8 (B) the total consideration;
5-9 (C) the amount of the down payment received at
5-10 the time the motor vehicle is sold;
5-11 (D) the date and amount of each subsequent
5-12 payment;
5-13 (E) the date of sale; and
5-14 (F) the date of any repossession.
5-15 (c) For retail sales paid in full at the time of sale, the
5-16 seller shall keep at the seller's principal office for at least
5-17 four years from the date of the sale documentation of complete
5-18 payment in the form of:
5-19 (1) a copy of the payment instrument or a receipt for
5-20 cash received; and
5-21 (2) a copy of the receipt for title application,
5-22 registration, and motor vehicle tax issued by the county tax
5-23 assessor-collector or a statement by the purchaser that is signed
5-24 and dated and indicates the date that each of the documents
5-25 necessary to apply for the title, register the vehicle, and pay the
5-26 motor vehicle sales tax were provided to the purchaser by the
5-27 seller.
6-1 (d) The document required under Subsection (c)(2) shall also
6-2 include a statement that the seller advised the purchaser that the
6-3 purchaser must pay a tax to the county tax assessor-collector.
6-4 (e) For sales for resale, the seller shall keep at the
6-5 seller's principal office for at least four years from the date of
6-6 the sale the purchaser's written statement of resale on a form
6-7 prescribed by the comptroller.
6-8 SECTION 6. Section 152.065, Tax Code, is amended to read as
6-9 follows:
6-10 Sec. 152.065. REQUIRED PERMITS <REGISTRATION AS A RETAILER;
6-11 PERMIT>. A motor vehicle owner required to collect, report, and
6-12 pay a tax on gross rental receipts imposed by this chapter and a
6-13 seller required to collect, report, and pay a tax on a
6-14 seller-financed sale shall register as a retailer with the
6-15 comptroller in the same manner as is required of a retailer under
6-16 Subchapter F, <of> Chapter 151 <of this code. The owner shall also
6-17 obtain from the comptroller a motor vehicle retailer's permit>.
6-18 SECTION 7. Section 152.068(a), Tax Code, is amended to read
6-19 as follows:
6-20 (a) The comptroller may revoke or suspend any one or more of
6-21 the <motor vehicle retailer's> permits held by a person if that
6-22 person fails to comply with a provision of this chapter or with a
6-23 rule of the comptroller relating to a tax imposed by this chapter.
6-24 SECTION 8. Subchapter D, Chapter 152, Tax Code, is amended
6-25 by adding Section 152.069 to read as follows:
6-26 Sec. 152.069. REGISTRATION OF MOTOR VEHICLE USING
6-27 SELLER-FINANCING. (a) The seller of a motor vehicle sold in a
7-1 seller-financed sale shall apply for the registration of, and a
7-2 Texas certificate of title for, the motor vehicle in the name of
7-3 the purchaser to the appropriate county tax assessor-collector.
7-4 (b) The seller shall provide to the county tax
7-5 assessor-collector a joint affidavit as prescribed by Section
7-6 152.062 in lieu of the motor vehicle sales tax imposed by Section
7-7 152.021. The affidavit shall include the seller's permit
7-8 identification number issued by the comptroller.
7-9 SECTION 9. Subsection (a), Section 10, Chapter 88, General
7-10 Laws, Acts of the 41st Legislature, 2nd Called Session, 1929
7-11 (Article 6675a-10, Vernon's Texas Civil Statutes), is amended to
7-12 read as follows:
7-13 (a) Except as provided by Subsections (c-1), (c-2), (c-3),
7-14 and (c-4) of this section, on Monday of each week each County Tax
7-15 Collector shall deposit in the County Depository of his County to
7-16 the credit of the County Road and Bridge Fund an amount equal to
7-17 one hundred per cent (100%) of the net collections made hereunder
7-18 during the preceding week until the amount so deposited for the
7-19 current calendar year shall have reached a total sum of Sixty
7-20 Thousand Dollars ($60,000), plus Three Hundred and Fifty Dollars
7-21 ($350) for each mile of county road, not to exceed five hundred
7-22 (500) miles, maintained by the County according to the latest data
7-23 available from the State Department of Highways and Public
7-24 Transportation, plus an amount equal to five per cent (5%) of the
7-25 tax and penalties collected by the County Tax Collector under
7-26 Chapter 152, Tax Code, in the preceding calendar year, plus an
7-27 amount equal to five per cent (5%) of the tax and penalties
8-1 collected by the Comptroller of Public Accounts under Section
8-2 152.047, Tax Code, in the preceding calendar year. All of the
8-3 amount of the tax and penalties collected under Chapter 152, Tax
8-4 Code, in the preceding calendar year that is retained by a county
8-5 under this subsection shall be used for county road construction,
8-6 maintenance, and rehabilitation, for bridge construction,
8-7 maintenance, and rehabilitation, for purchase of right-of-way for
8-8 road or highway purposes, or for relocation of utilities for road
8-9 or highway purposes. On or before January 30 of each year, each
8-10 county shall file a report, in a form promulgated by the State
8-11 Department of Highways and Public Transportation, with the State
8-12 Engineer-Director for the State Department of Highways and Public
8-13 Transportation that accurately sets forth the amounts and purposes
8-14 of all expenditures of the tax and penalties collected under
8-15 Chapter 152, Tax Code, and retained by the county under this
8-16 subsection.
8-17 SECTION 10. Section 152.103(a), Tax Code, is amended to
8-18 read as follows:
8-19 (a) A seller commits an offense if he fails to make and
8-20 retain complete records for the period of four years as provided by
8-21 this chapter <Section 152.063(a) of this code>.
8-22 SECTION 11. This Act takes effect October 1, 1993, and
8-23 applies to the sale of a motor vehicle on or after that date. The
8-24 sale of a motor vehicle before the effective date of this Act is
8-25 governed by the law in effect when the motor vehicle was sold, and
8-26 that law is continued in effect for that purpose.
8-27 SECTION 12. The importance of this legislation and the
9-1 crowded condition of the calendars in both houses create an
9-2 emergency and an imperative public necessity that the
9-3 constitutional rule requiring bills to be read on three several
9-4 days in each house be suspended, and this rule is hereby suspended.