By Craddick H.B. No. 2116
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the ad valorem taxation of certain inventories.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 23.121(a), Tax Code, is amended to read
1-5 as follows:
1-6 (a) In this section:
1-7 (1) "Chief appraiser" means the chief appraiser for
1-8 the appraisal district in which a dealer's motor vehicle inventory
1-9 is located.
1-10 (2) "Collector" means the county tax
1-11 assessor-collector in the county in which a dealer's motor vehicle
1-12 inventory is located.
1-13 (3) "Dealer" means a person who holds a dealer's
1-14 general distinguishing number issued by the Texas Department of
1-15 Transportation under the authority of Chapter 503, Transportation
1-16 Code [Article 6686, Revised Statutes], or who is legally recognized
1-17 as a motor vehicle dealer pursuant to the law of another state and
1-18 who complies with the terms of Section 152.063(f) [is authorized by
1-19 law or interstate reciprocity agreement to purchase vehicles in
1-20 Texas without paying the motor vehicle sales tax]. The term does
1-21 not include:
1-22 (A) a person who holds a manufacturer's license
1-23 issued by the Motor Vehicle Board of the Texas Department of
1-24 Transportation;
2-1 (B) an entity that is owned or controlled by a
2-2 person who holds a manufacturer's license issued by the Motor
2-3 Vehicle Board of the Texas Department of Transportation; or
2-4 (C) a dealer whose general distinguishing number
2-5 issued by the Texas Department of Transportation under the
2-6 authority of Chapter 503, Transportation Code [Article 6686,
2-7 Revised Statutes], prohibits the dealer from selling a vehicle to
2-8 any person except a dealer.
2-9 (4) "Dealer's motor vehicle inventory" means all motor
2-10 vehicles held for sale by a dealer.
2-11 (5) "Dealer-financed sale" means the sale of a motor
2-12 vehicle in which the seller finances the purchase of the vehicle,
2-13 is the sole lender in the transaction, and retains exclusively the
2-14 right to enforce the terms of the agreement evidencing the sale.
2-15 (6) "Declaration" means the dealer's motor vehicle
2-16 inventory declaration form promulgated by the comptroller as
2-17 required by this section.
2-18 (7) "Fleet transaction" means the sale of five or more
2-19 motor vehicles from a dealer's motor vehicle inventory to the same
2-20 person [business entity] within one calendar year.
2-21 (8) "Motor vehicle" means a towable recreational
2-22 vehicle or a fully self-propelled vehicle with at least two wheels
2-23 which has as its primary purpose the transport of a person or
2-24 persons, or property, whether or not intended for use on a public
2-25 street, road, or highway. The term does not include:
2-26 (A) a vehicle with respect to which the
2-27 certificate of title has been surrendered in exchange for a salvage
3-1 certificate in the manner provided by law; or
3-2 (B) equipment or machinery designed and intended
3-3 to be used for a specific work-related purpose other than the
3-4 transporting of a person or property.
3-5 (9) "Owner" means a dealer who owes current year
3-6 vehicle inventory taxes levied against a dealer's motor vehicle
3-7 inventory.
3-8 (10) "Person" means a natural person, corporation,
3-9 partnership, or other legal entity.
3-10 (11) "Sales price" means the total amount of money
3-11 paid or to be paid for the purchase of a motor vehicle as set forth
3-12 as "sales price" in the form entitled "Application for Texas
3-13 Certificate of Title" promulgated by the Texas Department of
3-14 Transportation. In a transaction that does not involve the use of
3-15 that form, the term means an amount of money that is equivalent, or
3-16 substantially equivalent, to the amount that would appear as "sales
3-17 price" on the Application for Texas Certificate of Title if that
3-18 form were involved.
3-19 (12) "Subsequent sale" means a dealer-financed sale of
3-20 a motor vehicle that, at the time of the sale, has been the subject
3-21 of a dealer-financed sale from the same dealer's motor vehicle
3-22 inventory in the same calendar year.
3-23 (13) "Total annual sales" means the total of the sales
3-24 price from every sale from a dealer's motor vehicle inventory for a
3-25 12-month period.
3-26 (14) "Towable recreational vehicle" means a
3-27 nonmotorized vehicle that is designed for temporary human
4-1 habitation for recreational, camping, or seasonal use and:
4-2 (A) is titled and registered with the Texas
4-3 Department of Transportation through the office of the collector
4-4 [county tax assessor-collector];
4-5 (B) is permanently built on a single chassis;
4-6 (C) contains one or more life support systems;
4-7 and
4-8 (D) is designed to be towable by a motor
4-9 vehicle.
4-10 SECTION 2. Section 23.121(h), Tax Code, is amended to read
4-11 as follows:
4-12 (h) If a dealer fails to file a declaration as required by
4-13 this section, or if, on the declaration required by this section, a
4-14 dealer reports the sale of fewer than five motor vehicles in the
4-15 prior year, the chief appraiser shall report that fact to the Texas
4-16 Department of Transportation and the department shall initiate
4-17 termination proceedings. The chief appraiser shall include with the
4-18 report a copy of a declaration, if any, indicating the sale by a
4-19 dealer of fewer than five motor vehicles in the prior year. A
4-20 report by a chief appraiser to the Texas Department of
4-21 Transportation as provided by this subsection is prima facie
4-22 grounds for the cancellation of the dealer's general distinguishing
4-23 number under Section 503.038(a)(9), Transportation Code, or for
4-24 refusal by the Texas Department of Transportation to renew the
4-25 dealer's general distinguishing number.
4-26 SECTION 3. Section 23.121(k), Tax Code, is amended to read
4-27 as follows:
5-1 (k) In addition to other penalties provided by law, a dealer
5-2 who fails to file a declaration required by this section shall
5-3 forfeit a penalty. A tax lien attaches to the dealer's business
5-4 personal property to secure payment of the penalty. The
5-5 appropriate district attorney, criminal district attorney, [or]
5-6 county attorney, chief appraiser, or person designated by the chief
5-7 appraiser shall collect the penalty established by this section in
5-8 the name of the chief appraiser [or collector]. Venue of an action
5-9 brought under this subsection is in the county in which the
5-10 violation occurred or in the county in which the owner maintains
5-11 his principal place of business or residence. A penalty forfeited
5-12 under this subsection is $1,000 for each month or part of a month
5-13 in which a declaration is not filed after it is due.
5-14 SECTION 4. Section 23.122(f), Tax Code, is amended to read
5-15 as follows:
5-16 (f) On or before the 10th day of each month a dealer shall
5-17 file with the collector the statement covering the sale of each
5-18 motor vehicle sold by the dealer in the prior month. A dealer
5-19 shall file a copy of the statement with the chief appraiser and
5-20 retain documentation relating to the disposition of each motor
5-21 vehicle sold. A chief appraiser or collector may examine documents
5-22 held by a dealer as required [provided] by this subsection in the
5-23 same manner, and subject to the same provisions, as are set forth
5-24 in Section 23.121(g) of this code.
5-25 SECTION 5. Section 23.122(g), Tax Code, is amended to read
5-26 as follows:
5-27 (g) The [Except as provided by this subsection, the]
6-1 requirements of Subsection (f) of this section apply to all
6-2 dealers, without regard to whether or not the dealer owes vehicle
6-3 inventory tax for the current year. A dealer who owes no vehicle
6-4 inventory tax for the current year because he was not in business
6-5 on January 1[:]
6-6 [(1) shall file the statement required by this section
6-7 showing the information required by this section for each month
6-8 during which the dealer is in business; and]
6-9 [(2)] may neither assign a unit property tax to a
6-10 motor vehicle sold by the dealer nor remit money with the statement
6-11 unless pursuant to the terms of a contract as provided by
6-12 Subsection (l) of this section.
6-13 SECTION 6. Section 23.122(l), Tax Code, is amended to read
6-14 as follows:
6-15 (l) A person who acquires the business or assets of an owner
6-16 may, by contract, agree to pay the current year vehicle inventory
6-17 taxes owed by the owner. The owner who owes the current year tax
6-18 and the person who acquires the business or assets of the owner
6-19 shall jointly notify the chief appraiser and the collector of the
6-20 terms of the agreement and of the fact that the purchaser [other
6-21 person] has agreed to pay the current year vehicle inventory taxes
6-22 owed by the selling dealer. The chief appraiser and the collector
6-23 shall adjust their records accordingly. Notwithstanding the terms
6-24 of Section 23.121 of this code, a person who agrees to pay current
6-25 year vehicle inventory taxes as provided by this subsection is not
6-26 required to file a declaration until the year following the
6-27 acquisition. This subsection does not relieve the selling owner of
7-1 [the] tax liability.
7-2 SECTION 7. Section 23.122(n), Tax Code, is amended to read
7-3 as follows:
7-4 (n) In addition to other penalties provided by law, a dealer
7-5 who fails to file a statement as required by this section shall
7-6 forfeit a penalty. A tax lien attaches to the dealer's [owner's]
7-7 business personal property to secure payment of the penalty. The
7-8 appropriate district attorney, criminal district attorney, [or]
7-9 county attorney, collector, or person designated by the collector
7-10 shall collect the penalty established by this section in the name
7-11 of the [chief appraiser or] collector. Venue of an action brought
7-12 under this subsection is in the county in which the violation
7-13 occurred or in the county in which the owner maintains his
7-14 principal place of business or residence. A penalty forfeited
7-15 under this subsection is $500 for each month or part of a month in
7-16 which a statement is not filed after it is due.
7-17 SECTION 8. The importance of this legislation and the
7-18 crowded condition of the calendars in both houses create an
7-19 emergency and an imperative public necessity that the
7-20 constitutional rule requiring bills to be read on three several
7-21 days in each house be suspended, and this rule is hereby suspended,
7-22 and that this Act take effect and be in force from and after its
7-23 passage, and it is so enacted.