86R14285 SMT-D

By: Martinez H.B. No. 4326

A BILL TO BE ENTITLED

AN ACT

relating to imposing a local fee on the sale or lease of a new luxury motor vehicle in certain areas.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle C, Title 3, Tax Code, is amended by adding Chapter 328 to read as follows:

CHAPTER 328. FEE ON SALE OR LEASE OF NEW LUXURY MOTOR VEHICLE IN

CERTAIN AREAS

Sec. 328.001. DEFINITIONS. (a) In this chapter:

(1) "Dealership" has the meaning assigned by Section 2301.002, Occupations Code.

(2) "Gross sale or lease price" means:

(A) the price at which a new luxury motor vehicle and any accessories attached on or before sale are offered for sale, before any discount or trade-in; and

(B) the total amount to be paid under a lease agreement for a new luxury motor vehicle, before any discount or trade-in.

(3) "Lease" means an agreement, other than a rental, by a franchised dealer to give for longer than 180 days exclusive use of a new luxury motor vehicle to another for consideration.

(4) "New luxury motor vehicle" means a new motor vehicle that has a gross sale or lease price of at least $55,000.

(5) "Qualifying municipality" means a municipality located in:

(A) a county described by Section 352.002(a)(11) or (18); or

(B) a county that borders at least two counties described by Section 352.002(a)(11).

(b) Except to the extent of a conflict, words used in this chapter and defined by Chapter 152 have the meanings assigned by Chapter 152.

Sec. 328.002. FEE IMPOSED; AMOUNT. (a) A fee is imposed on each retail sale or lease of a new luxury motor vehicle by a franchised dealer at a dealership in a qualifying municipality or the extraterritorial jurisdiction of that municipality.

(b) The amount of the fee is equal to one percent of the gross sale or lease price of the new luxury motor vehicle.

Sec. 328.003. APPLICABILITY OF FEE. (a) The fee authorized by this chapter on the sale of a new luxury motor vehicle does not apply to the sale of a new luxury motor vehicle unless the state tax imposed under Chapter 152 also applies.

(b) The fee authorized by this chapter on the lease of a new luxury motor vehicle applies to the lease of a new luxury motor vehicle in each situation in which the transaction is not considered a sale for purposes of the imposition of the state tax under Chapter 152.

(c) A sale or lease of a motor vehicle that is exempted from the state tax imposed under Chapter 152 by Subchapter E of that chapter is exempt from the fee imposed by this chapter.

Sec. 328.004. COLLECTION OF FEE. (a) Each franchised dealer that sells or leases a new luxury motor vehicle at a dealership in a qualifying municipality or the extraterritorial jurisdiction of that municipality shall collect the fee for the benefit of the municipality in which the dealership is located.

(b) If the dealership at which the sale or lease occurred is located in a qualifying municipality or in the extraterritorial jurisdiction of that municipality, the franchised dealer shall remit the fee to that municipality as provided by that municipality.

(c) The franchised dealer shall add the fee imposed by this chapter and any tax imposed under Chapter 152 to the sale or lease price, and when the fee and taxes are added the total amount is a debt owed to the franchised dealer by the purchaser or lessee until paid. If the total amount is not paid, the unpaid amount is recoverable at law in the same manner the original sale or lease price may be recovered.

(d) A municipality to which a franchised dealer is required to remit fees under this chapter shall by ordinance prescribe recordkeeping, reporting, and payment requirements and penalties, including interest charges, for failure to keep records required by the municipality, to report when required, or to pay the fee when due. The attorney acting for the municipality may bring suit against a franchised dealer who fails to collect a fee under this chapter and to pay it over to the municipality as required.

(e) A municipality by ordinance may permit a franchised dealer who is required to collect a fee under this chapter to retain a percentage of the amount collected and required to be reported as reimbursement to the franchised dealer for the costs of collecting the fee. The municipality may provide that the franchised dealer may retain the amount only if the dealer pays the fee and files reports as required by the municipality.

Sec. 328.005. USE OF REVENUE. A municipality may use revenue from the fee imposed under this chapter only to:

(1) construct, maintain, or improve public roadways;

(2) construct, maintain, or improve drainage or stormwater management or detention facilities; and

(3) construct, maintain, or improve flood control or prevention facilities.

SECTION 2. As soon as possible after the effective date of this Act, but not later than December 31, 2019, each municipality to which a franchised dealer will be required to remit fees under Section 328.004(b), Tax Code, as added by this Act, shall adopt any ordinances necessary to govern the collection and enforcement of the fee imposed under Chapter 328, Tax Code, as added by this Act.

SECTION 3. This Act applies only to a sale or lease of a new luxury motor vehicle on or after January 1, 2020. A sale or lease that occurs before that date is governed by the law in effect on the date the sale or lease occurred, and that law is continued in effect for that purpose.

SECTION 4. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2019.