How did Texas document and register a dealer vehicle loaned free to a public school driver-training program?

Plain-English summary

A dealer could loan a vehicle free to an approved public-school driver-training program using a joint affidavit and school exempt plate.

The affidavit stated that the vehicle was loaned without charge and would be used only for the approved program. The school district, not the dealer, applied for the exempt plate.

When school use ended, the district returned the exempt plate to the highway department for cancellation. A normal registration plate was unnecessary; the dealer used dealer plates when retrieving the vehicle.

After return to inventory, the car was treated like another vehicle held exclusively for resale rather than use.

What this means for you

The historical procedure tied exemption to limited school use, school-held exempt plates, and restoration of the car to resale inventory afterward.

Common questions

Q: Could the school use the car for other purposes?
A: No.

Q: Who received the exempt plate?
A: The school district.

Q: What happened after return to the dealer?
A: The vehicle went back into inventory for exclusive resale.

Citations and references

• No statute or rule was cited in the letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/7011L2012D02

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN

November 27, 1970

Mr. Cecil M. Hardin
95 Northwest Shopping Center
3600 Fredericksburg Road
San Antonio, Texas 78201

Dear Mr. Hardin:

Reference is made to your letter of November 19, in regard
to registration and use of driver training cars. I believe
that your questions can be better answered in the following
manner:

1. A joint affidavit is required to be filled out and
   filed by the automobile dealer and the school district
   showing that the motor vehicle in question is being
   loaned free of charge to the school district under an
   approved driver training program and will be used for
   no other purpose.

2. The school district must apply to the Highway Department
   for an exempt license plate to be placed on the vehicle. The
   exemption is granted for use to the school district and not
   to the dealer.

3. Upon removal of the vehicles from use the school must
   return the exempt plate used to the Highway Department for
   cancellation.

4. A normal registration license plate would be out of
   order to be placed on the vehicle as this is not required.
   In the event the dealer is required to pick upon the motor
   vehicle from the school the dealer plates should be placed
   thereon as this is his exemption from the payment of the tax.

After a motor vehicle has been returned to the inventory, it
should be treated the same as any other vehicle purchased
for the exclusive purpose of resale and not for use.

If additional information is needed, feel free to call upon
us.

Yours very truly,
Walter Nelson
Accounts Examiner Supervisor