Ezel / Tax Rulings / TX
TX 200008593L Motor Vehicle Tax 2000-08-11

What Texas resale certificates and tax permits did a wholesale auto dealer need for vehicles and repair parts?

Short answer: A wholesale dealer selling only to other dealers had no retail motor vehicle tax collection duty. It could use and collect the vehicle resale certificate for dealer sales, document out-of-state dealer sales with the designated exemption certificate, and obtain a sales-tax permit to buy resale parts tax-free.

Apply this to your situation

This page answers the general question as of 2000. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 2000
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller letter issued on the wholesale dealer facts presented. The form numbers, links, retention period, permit process, and dealer rules date from 2000 and require current verification. Any reliance protection would be limited to the original recipient; unrelated taxpayers cannot treat it as binding. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller explained that a wholesale auto dealer could buy vehicles only for resale to other dealers and could not sell at retail. Because motor vehicle tax applied only to retail sales, the wholesale dealer had no motor vehicle sales-tax collection responsibility.

For dealer-to-dealer vehicle sales, the dealer could use Texas Motor Vehicle Resale Certificate Form 14-313 and had to obtain the same form from Texas dealers buying from it. The letter required four-year retention. Sales to out-of-state dealers were documented with Form 14-312, also retained for four years.

For parts sold or attached to vehicles held for sale, the dealer could obtain a Texas Sales and Use Tax Permit and issue a resale certificate instead of paying sales tax. The letter identified application AP-201 and resale certificate Form 01-339. All form and retention details require current verification.

What this means for you

Wholesale auto dealers

Keep purchase and sales certificates in both directions. Wholesale-only status removed retail collection duty but did not remove documentation requirements.

Dealership parts departments

The vehicle resale certificate and the sales-tax resale certificate served different purchases. Parts required the sales and use tax permit process described in the letter.

Common questions

Q: Could the wholesale dealer sell vehicles at retail?

A: No. The letter limited it to resale to other dealers.

Q: How were out-of-state dealer sales documented?

A: With the Texas Motor Vehicle Sales Tax Exemption Certificate for vehicles taken out of state, Form 14-312 at the time.

Q: Could parts be bought tax-free for resale?

A: Yes, with a Texas Sales and Use Tax Permit and a resale certificate when the parts would be sold or attached to vehicles held for sale.

Citations and references

  • The letter cites form numbers 14-313, 14-312, AP-201, and 01-339 but no numbered statute or rule.

Source

Original ruling text

August 11, 2000

From: Irene Cage

To: **

Subject: Wholesale auto dealers

Dear **:

Thank you for your recent e-mail.

Wholesale dealers are eligible to purchase motor vehicles only for resale to
other dealers. You will not be eligible to sell at retail. Texas motor vehicle
tax is imposed only on retail sales, thus you will not have a motor vehicle
sales tax collection responsibility.

A dealer may issue a Texas Motor Vehicle Resale Certificate, form 14-313 in
lieu of tax for vehicles purchased for resale. The form is available online
at: http://www.window.state.tx.us/taxinfo/taxforms/14-forms.html/

You should obtain this document from Texas dealers purchasing vehicles from
you. This document must be retained for four years. Additionally, you must
provide this certificate when you purchase vehicles for resale.

A sale to an out of state dealer is documented by obtaining a Texas Motor
Vehicle Sales Tax Exemption Certificate-For Vehicles Taken Out of State, form
14-312. This form is available at the website mentioned in the previous
paragraph and must also be retained for four years.

Motor vehicle tax rules are available online at:
http://www.window.state.tx.us/taxinfo/rulendx/rulelist2.html#mv

A dealer may obtain a Texas Sales and Use Tax Permit in order to issue a resale
certificate in lieu of sales tax on the purchase of parts that will be sold or
attached to vehicles held for sale. AP-201, Application for Texas Sales and
Use Tax Permit and form 01-339, Texas Resale Certificate are both available at
online at: http://www.window.state.tx.us/taxinfo/taxforms/01-forms.html

This opinion is based on the information presented. If there are additional or
different facts, the opinion could change.

Tax Specialists are available during office hours (7:30am - 5:30pm Monday
through Friday) to answer questions concerning motor vehicle tax or to request
forms by mail. The toll free number is 1-800-252-1382.

If you have any questions, please do not hesitate to call us. My extension is
3-2995. The direct number is 512/463-2995. The e-mail address is
.

Sincerely,

Irene Cage
Tax Policy Division

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