1-1 By: Berlanga (Senate Sponsor - Armbrister) H.B. No. 995
1-2 (In the Senate - Received from the House March 24, 1993;
1-3 March 25, 1993, read first time and referred to Committee on
1-4 Finance; March 31, 1993, reported favorably by the following vote:
1-5 Yeas 13, Nays 0; March 31, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Montford x
1-9 Turner x
1-10 Armbrister x
1-11 Barrientos x
1-12 Bivins x
1-13 Ellis x
1-14 Haley x
1-15 Moncrief x
1-16 Parker x
1-17 Ratliff x
1-18 Sims x
1-19 Truan x
1-20 Zaffirini x
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the collection and disposition of the motor vehicle
1-24 sales tax on a motor vehicle sold using seller financing.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Section 152.001, Tax Code, is amended by adding
1-27 Subdivision (16) to read as follows:
1-28 (16) "Seller-financed sale" means a retail sale of a
1-29 motor vehicle by a dealer licensed under Article 6686, Revised
1-30 Statutes, in which the seller collects all or part of the total
1-31 consideration in periodic payments and retains a lien on the motor
1-32 vehicle until all payments have been received. The term does not
1-33 include a:
1-34 (A) retail sale of a motor vehicle in which a
1-35 person other than the seller provides the consideration for the
1-36 sale and retains a lien on the motor vehicle as collateral;
1-37 (B) lease; or
1-38 (C) rental.
1-39 SECTION 2. Section 152.021(a), Tax Code, is amended to read
1-40 as follows:
1-41 (a) A tax is imposed on every retail sale of every motor
1-42 vehicle sold in this state. Except as provided by Section 152.047,
1-43 the <The> tax is an obligation of and shall be paid by the
1-44 purchaser of the motor vehicle.
1-45 SECTION 3. Sections 152.041(b) and (c), Tax Code, are
1-46 amended to read as follows:
1-47 (b) Except as provided by Section 152.069, the <The> tax
1-48 assessor-collector may not accept an application unless the tax and
1-49 any penalty is paid.
1-50 (c) Except as provided by Section 152.047, the <The> tax
1-51 imposed by Section 152.021 of this code is due on the 20th working
1-52 day after the day that the motor vehicle is delivered to the
1-53 purchaser.
1-54 SECTION 4. Subchapter C, Chapter 152, Tax Code, is amended
1-55 by adding Sections 152.047 and 152.048 to read as follows:
1-56 Sec. 152.047. COLLECTION OF TAX ON SELLER-FINANCED SALE.
1-57 (a) Except as inconsistent with this chapter and rules adopted
1-58 under this chapter, the seller of a motor vehicle shall report and
1-59 pay the tax imposed on a seller-financed sale to the comptroller on
1-60 the seller's receipts from seller-financed sales in the same manner
1-61 as the sales tax is reported and paid by a retailer under Chapter
1-62 151.
1-63 (b) If a note, mortgage, account receivable, or other
1-64 document evidencing the purchaser's indebtedness to the seller of a
1-65 vehicle sold subject to a seller-financed sale does not bear
1-66 interest, it will be conclusively presumed that the total
1-67 consideration for the sale is principal.
1-68 (c) If a note, mortgage, account receivable, or other
2-1 document evidencing the purchaser's indebtedness to the seller of a
2-2 vehicle sold subject to a seller-financed sale bears interest, it
2-3 is conclusively presumed that interest accrues and is paid by the
2-4 purchaser on a straight line basis.
2-5 (d) The seller shall add the tax imposed on a
2-6 seller-financed sale to the sales price of the vehicle sold, and
2-7 when added, the tax is:
2-8 (1) a part of the sales price;
2-9 (2) a debt owed to the seller by the purchaser; and
2-10 (3) recoverable at law in the same manner as the sales
2-11 price.
2-12 (e) Regardless of the accounting method used by the seller,
2-13 the seller shall collect and pay the tax imposed on a
2-14 seller-financed sale to the comptroller as the seller receives the
2-15 proceeds of the sale.
2-16 (f) If the seller fails to apply, not later than the 60th
2-17 day after the date the motor vehicle is delivered to the purchaser,
2-18 for registration and a Texas certificate of title for a motor
2-19 vehicle sold in a seller-financed sale in accordance with Section
2-20 152.069, the seller is liable for all unpaid tax on the total
2-21 consideration, and the tax is due and must be sent to the
2-22 comptroller with the first report after the expiration of the
2-23 prescribed period.
2-24 (g) If a seller factors, assigns, or otherwise transfers the
2-25 right to receive payments, all unpaid tax is due on the total
2-26 consideration not reported at the time the agreement is factored,
2-27 assigned, or otherwise transferred. The seller shall report and
2-28 submit the tax in the report period in which the right to receive
2-29 the payment is factored, assigned, or otherwise transferred. The
2-30 seller may not take a deduction in the amount of tax due if a
2-31 transfer at a discount is made.
2-32 (h) The comptroller may proceed against the purchaser in a
2-33 seller-financed sale for the amount of any tax not paid by the
2-34 purchaser.
2-35 (i) The comptroller shall adopt rules and promulgate forms
2-36 necessary to implement this section.
2-37 Sec. 152.048. GROSS RECEIPTS PRESUMED SUBJECT TO TAX.
2-38 (a) All gross receipts of a seller required to obtain a permit
2-39 under Section 152.065 are presumed to be subject to the provisions
2-40 of this code.
2-41 (b) The presumption provided by Subsection (a) does not
2-42 apply to receipts:
2-43 (1) on which a tax imposed under other law is computed
2-44 and paid to the comptroller; or
2-45 (2) for which a properly completed resale or exemption
2-46 certificate is accepted by the seller.
2-47 (c) The seller may overcome the presumption under Subsection
2-48 (a) by credible evidence that the receipts are not from a
2-49 seller-financed sale or that the tax on those receipts has been
2-50 sent to the comptroller.
2-51 SECTION 5. Subchapter D, Chapter 152, Tax Code, is amended
2-52 by adding Section 152.0635 to read as follows:
2-53 Sec. 152.0635. RECORDS OF CERTAIN SELLERS. (a) In addition
2-54 to the requirements prescribed by Section 152.063, a seller engaged
2-55 in seller-financed sales who has a permit under Section 152.065
2-56 shall keep the records required by this section.
2-57 (b) For seller-financed sales, the seller shall keep at the
2-58 seller's principal office for at least four years from the date on
2-59 which the seller receives the final payment for the motor vehicle:
2-60 (1) the lienholder's copy of the receipt for title
2-61 application, registration, and motor vehicle tax issued by a county
2-62 tax assessor-collector; and
2-63 (2) a ledger or other document containing a complete
2-64 record of the payment history for that motor vehicle, including:
2-65 (A) the name and address of the purchaser;
2-66 (B) the total consideration;
2-67 (C) the amount of the down payment received at
2-68 the time the motor vehicle is sold;
2-69 (D) the date and amount of each subsequent
2-70 payment;
3-1 (E) the date of sale; and
3-2 (F) the date of any repossession.
3-3 (c) For retail sales paid in full at the time of sale, the
3-4 seller shall keep at the seller's principal office for at least
3-5 four years from the date of the sale documentation of complete
3-6 payment in the form of:
3-7 (1) a copy of the payment instrument or a receipt for
3-8 cash received; and
3-9 (2) a copy of the receipt for title application,
3-10 registration, and motor vehicle tax issued by the county tax
3-11 assessor-collector or a statement by the purchaser that is signed
3-12 and dated and indicates the date that each of the documents
3-13 necessary to apply for the title, register the vehicle, and pay the
3-14 motor vehicle sales tax were provided to the purchaser by the
3-15 seller.
3-16 (d) The document required under Subsection (c)(2) shall also
3-17 include a statement that the seller advised the purchaser that the
3-18 purchaser must pay a tax to the county tax assessor-collector.
3-19 (e) For sales for resale, the seller shall keep at the
3-20 seller's principal office for at least four years from the date of
3-21 the sale the purchaser's written statement of resale on a form
3-22 prescribed by the comptroller.
3-23 SECTION 6. Section 152.065, Tax Code, is amended to read as
3-24 follows:
3-25 Sec. 152.065. REQUIRED PERMITS <REGISTRATION AS A RETAILER;
3-26 PERMIT>. A motor vehicle owner required to collect, report, and
3-27 pay a tax on gross rental receipts imposed by this chapter and a
3-28 seller required to collect, report, and pay a tax on a
3-29 seller-financed sale shall register as a retailer with the
3-30 comptroller in the same manner as is required of a retailer under
3-31 Subchapter F, <of> Chapter 151 <of this code. The owner shall also
3-32 obtain from the comptroller a motor vehicle retailer's permit>.
3-33 SECTION 7. Section 152.068(a), Tax Code, is amended to read
3-34 as follows:
3-35 (a) The comptroller may revoke or suspend any one or more of
3-36 the <motor vehicle retailer's> permits held by a person if that
3-37 person fails to comply with a provision of this chapter or with a
3-38 rule of the comptroller relating to a tax imposed by this chapter.
3-39 SECTION 8. Subchapter D, Chapter 152, Tax Code, is amended
3-40 by adding Section 152.069 to read as follows:
3-41 Sec. 152.069. REGISTRATION OF MOTOR VEHICLE USING
3-42 SELLER-FINANCING. (a) The seller of a motor vehicle sold in a
3-43 seller-financed sale shall apply for the registration of, and a
3-44 Texas certificate of title for, the motor vehicle in the name of
3-45 the purchaser to the appropriate county tax assessor-collector.
3-46 (b) The seller shall provide to the county tax
3-47 assessor-collector a joint affidavit as prescribed by Section
3-48 152.062 in lieu of the motor vehicle sales tax imposed by Section
3-49 152.021. The affidavit shall include the seller's permit
3-50 identification number issued by the comptroller.
3-51 SECTION 9. Subsection (a), Section 10, Chapter 88, General
3-52 Laws, Acts of the 41st Legislature, 2nd Called Session, 1929
3-53 (Article 6675a-10, Vernon's Texas Civil Statutes), is amended to
3-54 read as follows:
3-55 (a) Except as provided by Subsections (c-1), (c-2), (c-3),
3-56 and (c-4) of this section, on Monday of each week each County Tax
3-57 Collector shall deposit in the County Depository of his County to
3-58 the credit of the County Road and Bridge Fund an amount equal to
3-59 one hundred per cent (100%) of the net collections made hereunder
3-60 during the preceding week until the amount so deposited for the
3-61 current calendar year shall have reached a total sum of Sixty
3-62 Thousand Dollars ($60,000), plus Three Hundred and Fifty Dollars
3-63 ($350) for each mile of county road, not to exceed five hundred
3-64 (500) miles, maintained by the County according to the latest data
3-65 available from the State Department of Highways and Public
3-66 Transportation, plus an amount equal to five per cent (5%) of the
3-67 tax and penalties collected by the County Tax Collector under
3-68 Chapter 152, Tax Code, in the preceding calendar year, plus an
3-69 amount equal to five per cent (5%) of the tax and penalties
3-70 collected by the Comptroller of Public Accounts under Section
4-1 152.047, Tax Code, in the preceding calendar year. All of the
4-2 amount of the tax and penalties collected under Chapter 152, Tax
4-3 Code, in the preceding calendar year that is retained by a county
4-4 under this subsection shall be used for county road construction,
4-5 maintenance, and rehabilitation, for bridge construction,
4-6 maintenance, and rehabilitation, for purchase of right-of-way for
4-7 road or highway purposes, or for relocation of utilities for road
4-8 or highway purposes. On or before January 30 of each year, each
4-9 county shall file a report, in a form promulgated by the State
4-10 Department of Highways and Public Transportation, with the State
4-11 Engineer-Director for the State Department of Highways and Public
4-12 Transportation that accurately sets forth the amounts and purposes
4-13 of all expenditures of the tax and penalties collected under
4-14 Chapter 152, Tax Code, and retained by the county under this
4-15 subsection.
4-16 SECTION 10. Section 152.103(a), Tax Code, is amended to
4-17 read as follows:
4-18 (a) A seller commits an offense if he fails to make and
4-19 retain complete records for the period of four years as provided by
4-20 this chapter <Section 152.063(a) of this code>.
4-21 SECTION 11. This Act takes effect October 1, 1993, and
4-22 applies to the sale of a motor vehicle on or after that date. The
4-23 sale of a motor vehicle before the effective date of this Act is
4-24 governed by the law in effect when the motor vehicle was sold, and
4-25 that law is continued in effect for that purpose.
4-26 SECTION 12. The importance of this legislation and the
4-27 crowded condition of the calendars in both houses create an
4-28 emergency and an imperative public necessity that the
4-29 constitutional rule requiring bills to be read on three several
4-30 days in each house be suspended, and this rule is hereby suspended.
4-31 * * * * *
4-32 Austin,
4-33 Texas
4-34 March 31, 1993
4-35 Hon. Bob Bullock
4-36 President of the Senate
4-37 Sir:
4-38 We, your Committee on Finance to which was referred H.B. No. 995,
4-39 have had the same under consideration, and I am instructed to
4-40 report it back to the Senate with the recommendation that it do
4-41 pass and be printed.
4-42 Montford,
4-43 Chairman
4-44 * * * * *
4-45 WITNESSES
4-46 FOR AGAINST ON
4-47 ___________________________________________________________________
4-48 Name: Allen Ray x
4-49 Representing: Tx Independent Auto Dealers
4-50 City: Austin
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