Ezel / Tax Rulings / TX
TX 8802L0957A05 Motor Vehicle Tax 1988-02-17

Did a retired vehicle have to be sold in Texas to qualify for Texas's fair-market-value deduction?

Short answer: No. The Comptroller said the retired vehicle did not have to be sold in Texas. It needed to be titled in Texas for business or personal use, retired, and offered for sale, but the offer could be made anywhere. This was a short 1988 taxpayer-specific opinion and does not establish that the historical deduction or its conditions remain current.

Apply this to your situation

This page answers the general question as of 1988. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1988
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 1988 Texas Comptroller taxpayer-response letter based on the facts presented. The letter itself warns that different facts could change the opinion, and STAR documents may no longer represent current policy even when not marked superseded. The ruling does not identify the statutory version or reproduce the deduction's other requirements, so verify the current Motor Vehicle Tax Code and Comptroller rules before acting. Taxpayer-identifying details are redacted. Historical phone numbers and administrative procedures in the source may be obsolete. 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 retired vehicle did not have to be sold in Texas to qualify for the fair-market-value deduction described in this 1988 letter. The Comptroller said the vehicle instead had to satisfy three stated conditions: it had to be titled in Texas for business or personal use, retired, and offered for sale.

The offer for sale could occur anywhere. The response therefore rejected a Texas-sale-location requirement, but it did not explain the rest of the deduction, define “retired,” or cite the controlling statute or rule.

What this means for you

Businesses retiring vehicles

Under the historical position stated here, the location of the eventual sale was not the decisive fact. Texas titling, retirement of the vehicle, and offering it for sale were the stated conditions.

Historical claims

This letter followed unspecified changes in the sales-tax law and was issued in 1988. Do not use it as proof that the same deduction, terminology, or filing procedure exists today.

Fact changes

The letter expressly limited its opinion to the facts presented. A vehicle not titled in Texas, not actually retired, or not offered for sale would fall outside the answer given.

Common questions

Q: Did the vehicle have to be sold in Texas?
A: No.

Q: Did it have to be titled in Texas?
A: Yes, according to the letter, for either business or personal use.

Q: Where could it be offered for sale?
A: Anywhere.

Q: Did the letter explain how to calculate the deduction?
A: No. It addressed only the stated eligibility conditions.

Citations and references

The letter cites no statute or administrative rule. It refers generally to changes in the sales-tax law and to a “fair market value deduction.”

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN 78774

February 17, 1988

Dear ***:

On behalf of Mr. Bullock, I hope you'll accept my apology for the delay
in
answering your question involving changes in the sales tax law. This
isn't the way we normally do business.

Our people were, and still are, swamped by a deluge of inquiries as they
attempted to interpret provisions of the new law and draft rules which
would not adversely impact businesses. In many instances, an answer to a
question just wasn't available when the question arrived.

To qualify for the fair market value deduction the retired vehicle need
not be sold in Texas, only titled in Texas for business or personal use,
and retired and offered for sale (anywhere).

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

Please feel free to contact me if you have additional questions. You may
write me, call toll-free 1-800-252-5555 from anywhere in Texas or phone
512/463-4600.

Sincerely,
Adina Whittemore
Tax Policy Division

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