TX 8603L0711F11 Motor Vehicle Tax 1986-03-19

Was a car bought in Texas for use in Mexico exempt from Texas motor vehicle sales tax?

Short answer: Yes, if the car was intended exclusively for use outside Texas, driven directly out of state, and not titled or registered in Texas. Texas registration conclusively showed Texas use and made sales tax due, although a valid one-trip permit or buyer's cardboard tag was not treated as registration. Later Texas use triggered use tax under the historical rule.

Apply this to your situation

This page answers the general question as of 1986. Ezel answers yours, under current Texas tax law, with citations.

Disclaimer: This STAR document contains a March 19, 1986 taxpayer-response letter and the complete version of Rule 3.90 effective December 19, 1984. The rule states a five-percent use-tax rate and a twenty-working-day payment deadline; both are historical and must not be used as current figures without verification. Export, title, registration, permit, seller-record, credit, and later-use rules may have changed. The letter expressly says different facts could change the opinion, and STAR documents may no longer represent current policy even when not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.

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 car purchased in Texas for the buyer's wife to use in Mexico was exempt from Texas motor vehicle sales tax if it was driven directly out of Texas and was not titled or registered in Texas.

The Comptroller explained that motor vehicles followed their own tax statute rather than the general export rules for other tangible personal property.

Rule 3.90 treated Texas registration as conclusive proof that the vehicle was for Texas use, defeating the exemption. A valid one-trip permit or buyer's cardboard tag was not considered Texas registration.

The reproduced rule also required the Texas seller to keep complete retail-sale records and provide the purchaser with the documents needed for Texas registration, even when the vehicle was not titled or registered here.

If a vehicle bought tax-free under the out-of-state-use exemption later returned for Texas use, the historical rule imposed use tax on the operator. It stated a five-percent rate on original purchase price, less credit for legally imposed tax paid to another state, and a twenty-working-day payment deadline. STAR publishes those figures as historical text, not current rates or deadlines.

The rule separately said Texas sales tax was not due when a Texas seller delivered a vehicle directly from one out-of-state location to another, provided the seller retained delivery records.

What this means for you

Texas purchases for foreign use

Intent alone was not enough. Direct export and avoidance of Texas title and registration were required.

Temporary movement documents

The historical rule distinguished one-trip permits and buyer's cardboard tags from Texas registration.

Later return to Texas

Later Texas use could trigger use tax even though the original purchase qualified for export treatment.

Common questions

Q: Could the buyer register the car in Texas and still claim exclusive Mexican use?
A: No.

Q: Did a one-trip permit count as Texas registration?
A: No under the reproduced rule.

Q: What if the car later came back for Texas use?
A: Historical use tax became due.

Q: Is the five-percent rate current?
A: This page does not claim that; it is the rate printed in the 1984 rule.

Citations and references

Texas Comptroller Rule 3.90 — motor vehicles purchased for use outside Texas
Texas Tax Code §§ 152.090 and 152.003 — authority cited in the reproduced rule

Source

STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
Opinion: https://star.comptroller.texas.gov/view/8603L0711F11

Original ruling text

March 19, 1986

Dear ***:

*** has asked me to write to you concerning Motor Vehicle Sales
Tax on a vehicle purchased for use in Mexico.

Motor vehicles are taxed under different statute than other tangible
personal property. I regret you were mistakenly given information
pertaining to sales tax on tangible personal property purchased for
export outside the United States.

I am enclosing a copy of Motor Vehicle Sales Tax Rule 3.90, Motor Vehicles
Purchased for Use Outside Texas. There is an exemption for vehicles
purchased for use outside of Texas, if the vehicle is driven directly
out-of-state and not titled and registered in Texas.

When you buy a new car for your wife to use in Mexico, you will not owe
Motor Vehicle Sales Tax as long as the vehicle is:

driven directly out-of-state, and
not titled and registered in Texas

If the vehicle is registered in Texas, Texas sales tax is due.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Administration Division

STATE OF TEXAS
COMPTROLLER OF PUBLIC ACCOUNTS
MOTOR VEHICLE SALES TAX

Rule 3.90. Motor Vehicles Purchased for Use Outside of Texas. (Texas Tax
Code 152.090, 152.003).

(a) Motor vehicle sales tax exemption.

(1) A motor vehicle purchased in Texas intended for use exclusively outside
of Texas is exempt from the motor vehicle sales tax.

(2) A vehicle exempt under this section may not be operated within Texas for
any purpose other than its being driven out of the state.

(3) The registration of a motor vehicle in Texas will be considered conclusive
proof that the vehicle is for use within Texas. A claim that a vehicle registered
in Texas was purchased with the intent to operate it exclusively outside of the
state will be denied. Valid one-trip permits or buyers' cardboard tags are not
considered registration within Texas for purposes of this rule.

(b) Seller's responsibility. The seller of a motor vehicle must keep complete
records of every sale at retail and must provide the purchaser a seller, donor
or trader's affidavit and any other documents necessary to register the vehicle
in Texas. The seller is not relieved of this responsibility even though the vehicle
is not registered or titled in Texas.

(1) Motor vehicle use tax is due on any motor vehicle that was purchased tax-free
under the provisions of this section and is later used within the State of Texas.

(2) Payment of the use tax is the obligation of the person operating the vehicle
in this state.

(3) The use tax rate is 5.0% of the original purchase price, less credit for any
legally imposed tax previously paid to another state by the purchaser or operator.

(4) The tax is due within twenty working days after the date the vehicle is first
returned to Texas.

(5) The purchaser must retain records showing the total consideration originally
paid for the vehicle and documenting the amount of any tax previously paid to
another state.

(d) Vehicles which never enter Texas.

(1) The Texas motor vehicle sales tax will not be due if a motor vehicle is sold
by a Texas seller but the vehicle is delivered from one out-of-state location
directly to the purchaser at another out-of-state location.

(2) The seller will be responsible for retaining sufficient records showing from
and to where the vehicle was delivered.

Effective Date: December 19, 1984
Filed with Secretary of State: December 4, 1984

BOB BULLOCK
Comptroller of Public Accounts
Effective Date: December 19, 1984

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