Did Texas's historical new-resident vehicle tax apply to a former Texas resident returning with cars registered in California?

Plain-English summary

The Texas Motor Vehicle Sales Tax Division applied the historical new-resident vehicle tax to a former Texas resident who returned from California with cars previously registered there in that person's name.

The letter said the special tax applied when a new resident brought a vehicle into Texas after it had been registered in that resident's name in another state or country. It applied even to a vehicle acquired by gift and replaced the ordinary use tax when both provisions might otherwise apply.

The response relied on Attorney General Opinion C-20 for the conclusion that former Texas residents were not excluded.

STAR now warns that the historical $15 new-resident amount and 4% use-tax rate are obsolete.

What this means for you

New and returning Texas residents

Do not use the amounts or definitions in this 1978 letter as current registration advice.

Vehicle registration staff and accountants

The historical test focused on prior registration in the person's own name outside Texas.

Common questions

Q: Did returning to Texas avoid the tax?

A: No, under the historical law described.

Q: Did prior out-of-state registration matter?

A: Yes.

Q: Is the $15 amount current?

A: No.

Citations and references

• TEX. TAX-GEN. ANN. art. 6.01(3) — historical new-resident use-tax citation.
• Texas Attorney General Opinion C-20 — cited for applying the provision to former Texas residents.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/7802L2015A10

Original ruling text

ALERT: The tax rates (including the New Resident Tax) cited in this article are no longer the current motor vehicle sales tax
or motor vehicle rental tax rates.

COMPTROLLER OF PUBLIC ACCOUNTS

STATE OF TEXAS

AUSTIN, 78774

February 22, 1978

Dear ***:

This letter is in response to your letter to the Attorney General concerning the $15.00 use tax imposed on motor vehicles brought into Texas by a new resident to this state.

The $15.00 use tax imposed by Article 6.01(3) applies to any motor vehicle which (1) is brought into Texas by a new resident and (2) has been previously registered in the new resident's name in any other state or foreign country. When the $15.00 use tax applies, it is imposed regardless of whether or not the 4% use tax (section 2) applies. For example, a motor vehicle acquired by gift outside this state and brought into Texas by a new resident would be taxed under section (3). It would not be taxed under section (2). The phrase "in lieu of the use tax imposed by section (2)" means that in a case where both use taxes (section 2 and 3) might apply, the $15.00 tax will be imposed "instead of" the 4% use tax.

You stated in your letter that you moved back to Texas from California and indicated the cars had been registered in your name in California. Since your circumstances meet the requirements of Section (3), the $15.00 use tax is due.

In 1963 the statute concerning the $15.00 use tax was changed to exclude the following: "However, a person is not liable for the tax imposed by this article if the sales or use tax imposed by any other provision of this Chapter has been previously paid upon such motor vehicle." By omitting this sentence and placing the obligation of payment of the $15.00 tax upon the new resident, all new residents are liable for the $15.00 use tax even if they are former Texas residents. This is supported by Attorney General Opinion C-20. A copy is attached.

I hope this will clarify why the $15.00 use tax must be paid on your two cars.

If you have any questions, you may write the Motor Vehicle Sales Tax Division or call toll free 1-800-252-5555.

Yours very truly,

Richard Montgomery, Director

Motor Vehicle Sales Tax Division