1-1 By: Craddick (Senate Sponsor - Brown) H.B. No. 2116
1-2 (In the Senate - Received from the House April 18, 1997;
1-3 April 22, 1997, read first time and referred to Committee on
1-4 Finance; May 5, 1997, reported favorably by the following vote:
1-5 Yeas 12, Nays 0; May 5, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the ad valorem taxation of certain inventories.
1-9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10 SECTION 1. Section 23.121(a), Tax Code, is amended to read
1-11 as follows:
1-12 (a) In this section:
1-13 (1) "Chief appraiser" means the chief appraiser for
1-14 the appraisal district in which a dealer's motor vehicle inventory
1-15 is located.
1-16 (2) "Collector" means the county tax
1-17 assessor-collector in the county in which a dealer's motor vehicle
1-18 inventory is located.
1-19 (3) "Dealer" means a person who holds a dealer's
1-20 general distinguishing number issued by the Texas Department of
1-21 Transportation under the authority of Chapter 503, Transportation
1-22 Code [Article 6686, Revised Statutes], or who is legally recognized
1-23 as a motor vehicle dealer pursuant to the law of another state and
1-24 who complies with the terms of Section 152.063(f) [is authorized by
1-25 law or interstate reciprocity agreement to purchase vehicles in
1-26 Texas without paying the motor vehicle sales tax]. The term does
1-27 not include:
1-28 (A) a person who holds a manufacturer's license
1-29 issued by the Motor Vehicle Board of the Texas Department of
1-30 Transportation;
1-31 (B) an entity that is owned or controlled by a
1-32 person who holds a manufacturer's license issued by the Motor
1-33 Vehicle Board of the Texas Department of Transportation; or
1-34 (C) a dealer whose general distinguishing number
1-35 issued by the Texas Department of Transportation under the
1-36 authority of Chapter 503, Transportation Code [Article 6686,
1-37 Revised Statutes], prohibits the dealer from selling a vehicle to
1-38 any person except a dealer.
1-39 (4) "Dealer's motor vehicle inventory" means all motor
1-40 vehicles held for sale by a dealer.
1-41 (5) "Dealer-financed sale" means the sale of a motor
1-42 vehicle in which the seller finances the purchase of the vehicle,
1-43 is the sole lender in the transaction, and retains exclusively the
1-44 right to enforce the terms of the agreement evidencing the sale.
1-45 (6) "Declaration" means the dealer's motor vehicle
1-46 inventory declaration form promulgated by the comptroller as
1-47 required by this section.
1-48 (7) "Fleet transaction" means the sale of five or more
1-49 motor vehicles from a dealer's motor vehicle inventory to the same
1-50 person [business entity] within one calendar year.
1-51 (8) "Motor vehicle" means a towable recreational
1-52 vehicle or a fully self-propelled vehicle with at least two wheels
1-53 which has as its primary purpose the transport of a person or
1-54 persons, or property, whether or not intended for use on a public
1-55 street, road, or highway. The term does not include:
1-56 (A) a vehicle with respect to which the
1-57 certificate of title has been surrendered in exchange for a salvage
1-58 certificate in the manner provided by law; or
1-59 (B) equipment or machinery designed and intended
1-60 to be used for a specific work-related purpose other than the
1-61 transporting of a person or property.
1-62 (9) "Owner" means a dealer who owes current year
1-63 vehicle inventory taxes levied against a dealer's motor vehicle
1-64 inventory.
2-1 (10) "Person" means a natural person, corporation,
2-2 partnership, or other legal entity.
2-3 (11) "Sales price" means the total amount of money
2-4 paid or to be paid for the purchase of a motor vehicle as set forth
2-5 as "sales price" in the form entitled "Application for Texas
2-6 Certificate of Title" promulgated by the Texas Department of
2-7 Transportation. In a transaction that does not involve the use of
2-8 that form, the term means an amount of money that is equivalent, or
2-9 substantially equivalent, to the amount that would appear as "sales
2-10 price" on the Application for Texas Certificate of Title if that
2-11 form were involved.
2-12 (12) "Subsequent sale" means a dealer-financed sale of
2-13 a motor vehicle that, at the time of the sale, has been the subject
2-14 of a dealer-financed sale from the same dealer's motor vehicle
2-15 inventory in the same calendar year.
2-16 (13) "Total annual sales" means the total of the sales
2-17 price from every sale from a dealer's motor vehicle inventory for a
2-18 12-month period.
2-19 (14) "Towable recreational vehicle" means a
2-20 nonmotorized vehicle that is designed for temporary human
2-21 habitation for recreational, camping, or seasonal use and:
2-22 (A) is titled and registered with the Texas
2-23 Department of Transportation through the office of the collector
2-24 [county tax assessor-collector];
2-25 (B) is permanently built on a single chassis;
2-26 (C) contains one or more life support systems;
2-27 and
2-28 (D) is designed to be towable by a motor
2-29 vehicle.
2-30 SECTION 2. Section 23.121(h), Tax Code, is amended to read
2-31 as follows:
2-32 (h) If a dealer fails to file a declaration as required by
2-33 this section, or if, on the declaration required by this section, a
2-34 dealer reports the sale of fewer than five motor vehicles in the
2-35 prior year, the chief appraiser shall report that fact to the Texas
2-36 Department of Transportation and the department shall initiate
2-37 termination proceedings. The chief appraiser shall include with the
2-38 report a copy of a declaration, if any, indicating the sale by a
2-39 dealer of fewer than five motor vehicles in the prior year. A
2-40 report by a chief appraiser to the Texas Department of
2-41 Transportation as provided by this subsection is prima facie
2-42 grounds for the cancellation of the dealer's general distinguishing
2-43 number under Section 503.038(a)(9), Transportation Code, or for
2-44 refusal by the Texas Department of Transportation to renew the
2-45 dealer's general distinguishing number.
2-46 SECTION 3. Section 23.121(k), Tax Code, is amended to read
2-47 as follows:
2-48 (k) In addition to other penalties provided by law, a dealer
2-49 who fails to file a declaration required by this section shall
2-50 forfeit a penalty. A tax lien attaches to the dealer's business
2-51 personal property to secure payment of the penalty. The
2-52 appropriate district attorney, criminal district attorney, [or]
2-53 county attorney, chief appraiser, or person designated by the chief
2-54 appraiser shall collect the penalty established by this section in
2-55 the name of the chief appraiser [or collector]. Venue of an action
2-56 brought under this subsection is in the county in which the
2-57 violation occurred or in the county in which the owner maintains
2-58 his principal place of business or residence. A penalty forfeited
2-59 under this subsection is $1,000 for each month or part of a month
2-60 in which a declaration is not filed after it is due.
2-61 SECTION 4. Section 23.122(f), Tax Code, is amended to read
2-62 as follows:
2-63 (f) On or before the 10th day of each month a dealer shall
2-64 file with the collector the statement covering the sale of each
2-65 motor vehicle sold by the dealer in the prior month. A dealer
2-66 shall file a copy of the statement with the chief appraiser and
2-67 retain documentation relating to the disposition of each motor
2-68 vehicle sold. A chief appraiser or collector may examine documents
2-69 held by a dealer as required [provided] by this subsection in the
3-1 same manner, and subject to the same provisions, as are set forth
3-2 in Section 23.121(g) of this code.
3-3 SECTION 5. Section 23.122(g), Tax Code, is amended to read
3-4 as follows:
3-5 (g) The [Except as provided by this subsection, the]
3-6 requirements of Subsection (f) of this section apply to all
3-7 dealers, without regard to whether or not the dealer owes vehicle
3-8 inventory tax for the current year. A dealer who owes no vehicle
3-9 inventory tax for the current year because he was not in business
3-10 on January 1[:]
3-11 [(1) shall file the statement required by this section
3-12 showing the information required by this section for each month
3-13 during which the dealer is in business; and]
3-14 [(2)] may neither assign a unit property tax to a
3-15 motor vehicle sold by the dealer nor remit money with the statement
3-16 unless pursuant to the terms of a contract as provided by
3-17 Subsection (l) of this section.
3-18 SECTION 6. Section 23.122(l), Tax Code, is amended to read
3-19 as follows:
3-20 (l) A person who acquires the business or assets of an owner
3-21 may, by contract, agree to pay the current year vehicle inventory
3-22 taxes owed by the owner. The owner who owes the current year tax
3-23 and the person who acquires the business or assets of the owner
3-24 shall jointly notify the chief appraiser and the collector of the
3-25 terms of the agreement and of the fact that the purchaser [other
3-26 person] has agreed to pay the current year vehicle inventory taxes
3-27 owed by the selling dealer. The chief appraiser and the collector
3-28 shall adjust their records accordingly. Notwithstanding the terms
3-29 of Section 23.121 of this code, a person who agrees to pay current
3-30 year vehicle inventory taxes as provided by this subsection is not
3-31 required to file a declaration until the year following the
3-32 acquisition. This subsection does not relieve the selling owner of
3-33 [the] tax liability.
3-34 SECTION 7. Section 23.122(n), Tax Code, is amended to read
3-35 as follows:
3-36 (n) In addition to other penalties provided by law, a dealer
3-37 who fails to file a statement as required by this section shall
3-38 forfeit a penalty. A tax lien attaches to the dealer's [owner's]
3-39 business personal property to secure payment of the penalty. The
3-40 appropriate district attorney, criminal district attorney, [or]
3-41 county attorney, collector, or person designated by the collector
3-42 shall collect the penalty established by this section in the name
3-43 of the [chief appraiser or] collector. Venue of an action brought
3-44 under this subsection is in the county in which the violation
3-45 occurred or in the county in which the owner maintains his
3-46 principal place of business or residence. A penalty forfeited
3-47 under this subsection is $500 for each month or part of a month in
3-48 which a statement is not filed after it is due.
3-49 SECTION 8. The importance of this legislation and the
3-50 crowded condition of the calendars in both houses create an
3-51 emergency and an imperative public necessity that the
3-52 constitutional rule requiring bills to be read on three several
3-53 days in each house be suspended, and this rule is hereby suspended,
3-54 and that this Act take effect and be in force from and after its
3-55 passage, and it is so enacted.
3-56 * * * * *