BILL ANALYSIS

H.B. 2112

By: Spitzer

Ways & Means

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Interested parties note that under previous law, a person could buy a car from a neighbor and pay a vehicle sales tax on that amount as reported by the buyer when registering the vehicle. However, the parties further note that taxpayers are currently required to pay a standard presumptive value tax based on the greater of the purchase price or a specified percentage of the value in a recognized motor vehicle value guide. If the buyer disagrees with the calculated tax, the only recourse is to obtain a certified appraisal, a costly and time-consuming process that is not guaranteed to result in a lower valuation. As a result, taxpayers are forced to pay the standard presumptive value-based tax or pay an appraiser an amount that is often equal to or more than the original standard presumptive value-based tax. The parties assert that although this tax policy change was intended to fight individuals who did not disclose the true amount paid for a vehicle, honest taxpayers and low-income citizens are being burdened with unfair taxation as an unintended consequence. H.B. 2112 seeks to address this issue.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 2112 amends the Tax Code to require a county tax assessor-collector to compute the motor vehicle sales and use tax on the valuation of a motor vehicle if the valuation is shown on a notarized affidavit stating the purchase price of the motor vehicle and containing both the seller's and buyer's signatures.

EFFECTIVE DATE

September 1, 2015.