Ezel / Tax Rulings / TX
TX 7707L2027D03 Motor Vehicle Tax 1977-07-06

Was a court-ordered vehicle transfer with no consideration, such as under a divorce decree, a taxable sale?

Short answer: No. The internal memorandum said a court-ordered vehicle transfer with no consideration, including a transfer under a divorce decree, should not be treated as a sale for historical motor vehicle sales and use tax purposes.

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This page answers the general question as of 1977. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1977
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 a July 6, 1977 Comptroller interoffice memorandum, not a taxpayer-specific ruling. It relies on Texas Attorney General Opinions H-273, S-22, and a third citation printed as '9-6871'; this page preserves that text and does not silently correct it. Court-ordered transfers, divorce decrees, consideration, vehicle title procedure, and sales and use tax law may have changed. The memorandum states only the no-consideration rule and does not address debt, liens, cash, or other value transferred. STAR documents may no longer represent current policy even when not marked superseded. 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

A court-ordered vehicle transfer with no consideration was not a historical motor vehicle sale.

The internal memorandum gave a divorce decree as the example and relied on three Texas Attorney General opinions for its reasoning.

It did not discuss a transfer involving assumed debt, liens, cash, property, or any other consideration.

What this means for you

The absence of consideration was essential to the memorandum's conclusion. A court order alone was not described as enough when value also changed hands.

Common questions

Q: Did a no-consideration divorce transfer count as a sale?
A: No.

Q: Did the memorandum cover assumed debt or liens?
A: No.

Citations and references

  • Texas Attorney General Opinion No. H-273 (1974)
  • Texas Attorney General Opinion No. S-22 (1953)
  • Texas Attorney General Opinion No. 9-6871 (1945), as printed in the memorandum

Source

Original ruling text

BOB BULLOCK
INTEROFFICE COMPTROLLER OF
MEMORANDUM PUBLIC ACCOUNTS

Date: July 6, 1977

To: Richard Montgomery

From: Judy Cunningham

Subject: Court ordered Transfers of Motor Vehicles

Following the reasoning of TEX. ATT'Y GEN. OP. Nos. H-273
(1974), S-22(1953) an 9-6871(1945), court ordered transfers
of motor vehicles in which there is no consideration such
as divorce decrees should not be considered "sales" for
motor vehicles sales and use tax purposes.

Judy Cunningham

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