By Siebert H.B. No. 1730
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to transfer of title to a motor vehicle, the collection
1-3 and administration of the motor vehicle sales tax, and certain
1-4 disclosures that must be made to the purchaser of a motor vehicle.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 152.001, Tax Code, is amended to read as
1-7 follows:
1-8 Sec. 152.001. Definitions. In this chapter:
1-9 (1) "Sale" includes:
1-10 (A) an installment and credit sale;
1-11 (B) an exchange of property for property or
1-12 money;
1-13 (C) an exchange in which property is transferred
1-14 but the seller retains title as security for payment of the
1-15 purchase price; and
1-16 (D) any other closed transaction that
1-17 constitutes a sale.
1-18 (2) "Retail sale" means a sale of a motor vehicle
1-19 except:
1-20 (A) a sale in which the purchaser is a dealer
1-21 who holds a general distinguishing number issued pursuant to the
1-22 terms of Article 6686, Revised Statutes, who acquires a vehicle for
1-23 the exclusive purpose of resale; or
2-1 (B) a sale of a vehicle that is operated under
2-2 and in accordance with Article 6686, Revised Civil Statutes of
2-3 Texas, 1925, as amended.
2-4 (3) "Motor Vehicle" includes:
2-5 (A) a self-propelled vehicle designed to
2-6 transport persons or property on a public highway;
2-7 (B) a trailer and semitrailer, including a van,
2-8 flatbed, tank, dumpster, dolly, jeep, stinger, auxiliary axle, or
2-9 converter gear; and
2-10 (C) a house trailer as defined by the
2-11 Certificate of Title Act (Article 6687-1, Vernon's Texas Civil
2-12 Statutes).
2-13 (4) "Motor Vehicle" does not include:
2-14 (A) a device moved only by human power;
2-15 (B) a device used exclusively on stationary
2-16 rails or tracks;
2-17 (C) road-building machinery; or
2-18 (D) a mobile office.
2-19 (5) "Rental" means:
2-20 (A) an agreement by the owner of a motor vehicle
2-21 to give for not longer than 180 days the exclusive use of that
2-22 vehicle to another for consideration;
2-23 (B) an agreement by the original manufacturer of
2-24 a motor vehicle to give exclusive use of the motor vehicle to
2-25 another for consideration; or
3-1 (C) an agreement to give exclusive use of a
3-2 motor vehicle to another for re-rental purposes.
3-3 (6) "Lease" means an agreement, other than a rental,
3-4 by an owner of a motor vehicle to give for longer than 180 days
3-5 exclusive use of the vehicle to another for consideration.
3-6 (7) "Public agency" means:
3-7 (A) a department, commission, board, office,
3-8 institution, or other agency of this state or of a county, city,
3-9 town, school district, hospital district, water district, or other
3-10 special district or authority or political subdivision created by
3-11 or under the constitution or the statutes of this state; or
3-12 (B) an unincorporated agency or instrumentality
3-13 of the United States.
3-14 (8) "Gross rental receipts" means value received or
3-15 promised as consideration to the owner of a motor vehicle for
3-16 rental of the vehicle, but does not include:
3-17 (A) separately stated charges for insurance;
3-18 (B) charges for damages to the motor vehicle
3-19 occurring during the rental agreement period;
3-20 (C) separately stated charges for motor fuel
3-21 sold by the owner of the motor vehicle; or
3-22 (D) discounts.
3-23 (9) "Owner of a motor vehicle" means:
3-24 (A) a person named in the certificate of title
3-25 as the owner of the vehicle; or
4-1 (B) a person who has the exclusive use of a
4-2 motor vehicle by reason of a rental and holds the vehicle for
4-3 re-rental.
4-4 (10) "Orthopedically handicapped person" means a
4-5 person who because of a physical impairment is unable to operate or
4-6 reasonably be transported in a motor vehicle that has not been
4-7 specially modified.
4-8 (11) "Volunteer fire department" means a company,
4-9 department, or association whose members receive no or nominal
4-10 compensation and which is organized for the purpose of answering
4-11 fire alarms and extinguishing fires or answering fire alarms,
4-12 extinguishing fires, and providing emergency medical services.
4-13 (12) "Motor vehicle used for religious purposes" means
4-14 a motor vehicle that is:
4-15 (A) designed to carry more than six passengers;
4-16 (B) sold to, rented to, or used by a church or
4-17 religious society;
4-18 (C) used primarily for the purpose of providing
4-19 transportation to and from a church or religious service or
4-20 meeting; and
4-21 (D) not registered as a passenger vehicle and
4-22 not used primarily for the personal or official needs or duties of
4-23 a minister.
4-24 (13) "Farm machine" means a self-propelled motor
4-25 vehicle specially adapted for use in the production of crops or
5-1 rearing of livestock, including poultry, and use in feedlots and
5-2 includes a self-propelled motor vehicle specially adapted for
5-3 applying plant food materials, agricultural chemicals, or feed for
5-4 livestock. "Farm machine" does not include any self-propelled
5-5 motor vehicle specifically designed or specially adapted for the
5-6 sole purpose of transporting agricultural products, plant food
5-7 materials, agricultural chemicals, or feed for livestock.
5-8 (14)
5-9 (15) "Nonprofit" means:
5-10 (A) organized as a nonprofit corporation under
5-11 the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
5-12 Vernon's Texas Civil Statutes); or
5-13 (B) organized and operated in a way that does
5-14 not result in accrual of distributable profits, realization of
5-15 private gain resulting from payment of compensation other than
5-16 reasonable compensation for services rendered by persons who are
5-17 not members of the organization, or realization of any other form
5-18 of private gain.
5-19 (16) "Seller-financed sale" means a retail sale of a
5-20 motor vehicle by a dealer licensed under Article 6686, Revised
5-21 Statutes, in which the seller collects all or part of the total
5-22 consideration in periodic payments and retains a lien on the motor
5-23 vehicle until all payments have been received. The term does not
5-24 include a:
5-25 (A) retail sale of a motor vehicle in which a
6-1 person other than the seller provides the consideration for the
6-2 sale and retains a lien on the motor vehicle as collateral;
6-3 (B) lease; or
6-4 (C) rental.
6-5 (17) <(16)> "Mobile office" means a trailer designed
6-6 to be used as an office, sales outlet, or other workplace.
6-7 SECTION 2. Subsection (a), Section 152.021, Tax Code, is
6-8 amended to read as follows:
6-9 (a) A tax is imposed on every retail sale of every motor
6-10 vehicle sold in this state. Except as provided by this chapter
6-11 <Section 152.047>, the tax is an obligation of and shall be paid by
6-12 the purchaser of the motor vehicle.
6-13 SECTION 3. Chapter 152, Tax Code, is amended by adding
6-14 Section 152.0411 to read as follows:
6-15 Sec. 152.0411. COLLECTION BY SELLERS. (a) A seller other
6-16 than an auctioneer who makes a sale subject to the sales tax
6-17 imposed by Section 152.021 of this chapter shall add the amount of
6-18 the tax to the sales price, and when the amount of the tax is
6-19 added:
6-20 (1) it is a debt of the purchaser to the seller until
6-21 paid; and
6-22 (2) if unpaid, it is recoverable at law in the same
6-23 manner as the original sales price.
6-24 (b) The seller shall remit to the tax assessor-collector in
6-25 the time and manner provided by law, taxes collected by the seller
7-1 as provided by this section.
7-2 (c) This section applies only to the sale of a vehicle that
7-3 is to be registered in Texas. If a purchaser intends to register a
7-4 vehicle outside Texas, the purchaser shall indicate that intent by
7-5 affidavit signed by the purchaser under oath.
7-6 (d) This section does not apply to a seller-financed sale.
7-7 (e) In this section, "auctioneer" means a person who holds
7-8 an auctioneer's license issued by the Texas Department of Licensing
7-9 and Regulation.
7-10 SECTION 4. Section 152.044, Tax Code, is amended to read as
7-11 follows:
7-12 Sec. 152.044. Payment by Seller. (a) If the comptroller on
7-13 an audit of the records of a seller finds that the amount of tax
7-14 due was incorrectly reported on a joint statement and that the
7-15 amount of tax paid was less than the amount due <or that the seller
7-16 failed to execute and deliver to the purchaser a joint statement
7-17 and any other documents necessary to register the vehicle>, the
7-18 seller and purchaser are jointly and severally liable for the
7-19 amount of the tax determined to be due.
7-20 (b) If the comptroller on audit of the records of a seller
7-21 finds that the seller failed to execute and deliver to the tax
7-22 assessor-collector in the time and manner provided by law the
7-23 documents necessary to register the vehicle in the name of the
7-24 purchaser, including the joint statement, together with the tax
7-25 due, if any, the seller is liable for the amount of the tax, plus
8-1 penalty and interest, if any, determined to be due.
8-2 SECTION 5. Section 152.063, Tax Code, is amended by adding a
8-3 new Subsection (g) to read as follows and by renumbering current
8-4 Subsection (g) as Subsection (h):
8-5 (g) A seller shall maintain at the seller's principal place
8-6 of business for at least four years from the date of sale, the
8-7 purchaser's affidavit required by Section 152.0411(c) of this code.
8-8 SECTION 6. Section 27, Certificate of Title Act (Article
8-9 6687-1, Vernon's Texas Civil Statutes), is amended to read as
8-10 follows:
8-11 Sec. 27. (a) Before selling or disposing of any motor
8-12 vehicle required to be registered or licensed in this State on any
8-13 highway or public place within this State, except with dealer's
8-14 metal or cardboard license number thereto attached as now provided
8-15 by law, the owner shall make application to the designated agent in
8-16 the county of his domicile or the county in which the vehicle is
8-17 purchased or encumbered upon form to be prescribed by the
8-18 Department for a certificate of title for such motor vehicle.
8-19 (b) The seller of a motor vehicle shall apply for the
8-20 registration, and Texas certificate of title in the name of the
8-21 purchaser of the motor vehicle that is the subject of the sale.
8-22 The seller shall file with the appropriate designated agent all
8-23 documents necessary to transfer title to the vehicle and register
8-24 the vehicle in the name of the purchaser and shall, at the same
8-25 time, remit motor vehicle sales tax if any. The duty placed on the
9-1 seller by this section is solely that of the seller and applies
9-2 both to a first sale and a subsequent sale.
9-3 (c) The seller shall complete the transfer of title and
9-4 registration requirements placed on the seller by Subsection (b) of
9-5 this section in the time and manner provided by law.
9-6 SECTION 7. Subsection (h-1), Article 7.01, Revised Statutes
9-7 (Article 5069-7.01, Vernon's Texas Civil Statutes), is amended to
9-8 read as follows:
9-9 (h-1) In addition to the provisions of Section (h) of this
9-10 article, "principal balance" includes a motor vehicle inspection
9-11 fee and a documentary fee for services actually rendered to, for or
9-12 on behalf of the retail buyer in preparing, handling, and
9-13 processing documents relating to the motor vehicle and the closing
9-14 of the transaction evidenced by the retail installment contract.
9-15 If a documentary fee is charged:
9-16 (i) it must be charged to both cash and credit buyers;
9-17 (ii) it may not exceed $50;
9-18 (iii) it shall be disclosed on the retail installment
9-19 contract as a separate itemized charge; and
9-20 (iv) the buyer's order and the retail installment
9-21 contract shall include in reasonable proximity to the point in the
9-22 buyer's order and retail installment contract where the documentary
9-23 fee is disclosed the amount of the documentary fee to be charged
9-24 and the following notice in type that is boldfaced, capitalized,
9-25 underlined, or otherwise set out from surrounding written material
10-1 so as to be conspicuous:
10-2 "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A
10-3 DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO
10-4 BUYERS FOR HANDLING DOCUMENTS AND PERFORMING SERVICES RELATING TO
10-5 THE CLOSING OF A SALE. <BUYERS MAY AVOID PAYMENT OF THE FEE TO THE
10-6 SELLER BY HANDLING THE DOCUMENTS AND PERFORMING THE SERVICES
10-7 RELATING TO THE CLOSING OF THE SALE.> A DOCUMENTARY FEE MAY NOT
10-8 EXCEED $50. THIS NOTICE IS REQUIRED BY LAW."
10-9 (v) If the language primarily used in the oral sales
10-10 presentation is not the same as that in which the retail
10-11 installment contract is written, the seller shall furnish to the
10-12 buyer a written statement containing the notice set out in
10-13 Subsection (iv) in the language primarily used in the oral sales
10-14 presentation.
10-15 SECTION 8. EFFECTIVE DATE: This Act takes effect January 1,
10-16 1996.
10-17 SECTION 9. The importance of this legislation and the
10-18 crowded condition of the calendars in both houses create an
10-19 emergency and an imperative public necessity that the
10-20 constitutional rule requiring bills to be read on three several
10-21 days in each house be suspended, and this rule is hereby suspended,
10-22 and that this Act take effect and be in force according to its
10-23 terms, and it is so enacted.