Was a glider kit subject to Texas motor vehicle tax, and what happened when the rebuilt truck was later sold?

Plain-English summary

A glider kit was taxed as parts under the historical limited sales tax, not as a motor vehicle. A later sale of the completed truck was different.

The kit came with a manufacturer's statement of origin and vehicle identification number, but remained a set of parts. The buyer paid Limited Sales, Excise and Use Tax to the kit seller.

When the same owner installed the kit and retitled the modified truck, no motor vehicle sale or ownership change occurred, so no motor vehicle tax was due. The owner surrendered the kit MSO and old title, filed Form 30, and documented the non-taxable retitling on an affidavit and Form 31.

If a person instead assembled a truck from a kit and other components and sold the completed unit, that was a taxable motor vehicle sale. Only one transfer affidavit was required even if the buyer submitted both an assigned kit MSO and assigned title.

What this means for you

The bulletin separated three events: buying parts, rebuilding and retitling without an ownership change, and selling the completed vehicle. Each received different treatment.

Common questions

Q: Did the kit purchase owe motor vehicle tax?
A: No. Historical limited sales tax applied instead.

Q: Did the same owner's retitling create tax?
A: No.

Q: Did selling the completed rebuilt truck create tax?
A: Yes.

Citations and references

• No statute or rule was cited in the bulletin.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/7903L2019D12

Original ruling text

March 28, 1979

Motor Vehicle Sales & Use Tax Bulletin No. 1979-B

All Tax Assessor-Collectors

Ladies and Gentlemen:

Glider kits consist of a set of parts which enable an owner to upgrade a truck
or truck tractor to the equivalent of a later model vehicle. Glider kits may be
sold in a variety of combinations and are also called "glove frames" or
"rebuilt kits."

Glider kits come with a Manufacturer's Statement of Origin (MSO) and a Vehicle
Identification Number (VIN). However, since a glider kit is a set of parts, and
not a motor vehicle, no Motor Vehicle Sales and Use Tax is due on the purchase
of the kit. Limited Sales, Excise and Use Tax should be paid to the seller at
the time of purchase.

Once a truck has been updated by applying a glider kit, it must be retitled and
reregistered. The glider kit MSO and the existing title must be surrendered and
a Form 30 Application For Title completed.

When the same owner retitles and reregisters his modified motor vehicle, a
Seller, Donor, or Trader's Affidavit must be completed documenting that no
motor vehicle tax is due. Since there has been no sale of a motor vehicle and
no change of ownership, no taxable transaction has occurred. Examples of the
way to document these transactions on both the Seller, donor, or Trader's
Affidavit and Form 31 Tax Receipt are attached.

Please note that when a person purchases a glider kit, combines it with an
existing truck or other component parts to make a truck, and then sells the
completed unit, a sale of a motor vehicle has occurred and motor vehicle tax is
due. These transactions should be documented like all motor vehicle sales. The
new owner may submit both an assigned glider kit MSO and an assigned title.
However, only one Seller, Donor or Trader's Affidavit must be completed
documenting the transfer.

If you have any questions concerning the way to handle transactions involving
glider kits, please don't hesitate to contact the Motor Vehicle Sales Tax
Division or call 1-800-252-5555 toll-free from anywhere in Texas.

Yours very truly,

Richard Montgomery, Director
Motor Vehicle Sales Tax Division