Did Texas credit motor vehicle sales tax paid to a city or other political subdivision of another state?

Plain-English summary

Texas allowed the historical vehicle-tax credit for sales tax paid to another state's political subdivision as well as to the state itself.

The inquiry noted that the statute and Attorney General Opinion M-241 referred to tax paid to another state “or subdivision thereof,” while a guide discussed only payments to states.

The Ad Valorem-Intangible Tax Division consulted the Legal Section and concluded that both the other state's tax and its local political subdivision's sales tax had to be deducted. Louisiana local vehicle tax was the example presented.

What this means for you

The internal interpretation treated qualifying state and local components of another jurisdiction's vehicle tax consistently for credit purposes.

Common questions

Q: Did credit cover only tax paid directly to another state?
A: No.

Q: Did it include a political subdivision's tax?
A: Yes.

Citations and references

• Article V(1) of article 7359a, Vernon's Texas Civil Statutes
• Texas Attorney General Opinion No. M-241

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/7107L2010D10

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

July 28, 1971

Mr. Cecil M. Hardin, Regional Manager
State Comptroller's Department
97 Northwest Shopping Center
3600 Fredericksburg Road
San Antonio, Texas 78201

Re: Credit for Motor Vehicle Sales
and Use Tax paid to political
subdivisions of other States

Dear Sir:

I have received your letter of July 22, 1971, with reference to the above
captioned subject.

From the reading of Article V (1) of Article 7359 V. T. C. S. it is ap-
parent that the State of Texas must allow a deduction for not only the
State Sales Tax paid to another State but also must make a further deduc-
tion for any sales tax paid to any political subdivision in that State.

I have conferred on this matter with the Legal Section and they concur in
this thought.

Thanking you for submitting this question, I am

Yours very truly,
J. B. Craig, Director
AD VALOREM-INTANGIBLE TAX DIVISION

July 22, 1971

Hon. Robert S. Calvert
State Comptroller of Public Accounts
Capitol Station
Austin, Texas 78711

Attention: Ad Valorem Tax Division

Re: Credit for Motor Vehicle Sales
and Use Tax paid to political
subdivisions of other states

Dear Sir:

Reference is made to Attorney General's Opinion No. M-241 and to instruc-
tions on Page 24 of the most recent Motor Vehicle Sales and Use Tax Guide
Book under the heading "Credit - Allowed for Tax Payments in other
states."

Article V (1) of Article 7359 a (Vernon's Texas Civil Statutes), as
quoted
in the aforementioned Attorney General's Opinion, provides a credit for
taxes paid to another state or subdivision thereof. However, subsequent
instructions only refer to taxes paid in, or to, other states.

Is Attorney General's Opinion No. M-241 to be construed as allowing
credit
for Motor Vehicle Sales and Use Tax paid to a political subdivision of
another state? We have encountered this situation in the case of motor
vehicles brought into Texas from the state of Louisiana, where a local
sales tax on motor vehicles appears to be in effect.

If further information is required, please advise.

Yours very truly,
Cecil M. Hardin
Regional Manager