Ezel / Tax Rulings / TX
TX 9102L1144C09 Motor Vehicle Tax 1991-02-12

Did renting a licensed trailer with an empty water tank trigger Texas motor vehicle rental tax?

Short answer: Yes, if the contract lasted 180 days or less. The owner had to collect the historical 6% motor vehicle rental tax and obtain a rental tax account. A single contract lasting more than 180 days was treated as a lease, with no motor vehicle rental tax due.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1991
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 an official 1991 Texas Tax Administration letter issued on a described licensed trailer with an empty water tank. It predates modern Private Letter Ruling reliance terms and cannot bind the Comptroller for unrelated taxpayers. The quoted 6% rate, 180-day dividing line, trailer classification, rental-tax account, application, collection, and remittance procedures are historical and may have changed. The enclosed application is not reproduced in STAR. Taxpayer-identifying details are redacted. 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

The Texas Tax Administration Division treated a licensed trailer with an attached empty water tank as a motor vehicle for the described rental.

A contract lasting 180 days or less was a rental. The owner had to collect and remit the historical 6% motor vehicle rental tax and apply for a motor vehicle rental tax account.

A single contract lasting more than 180 days was treated as a lease, so no motor vehicle rental tax was due under the letter.

What this means for you

Trailer rental companies

Contract duration controlled the historical rental-versus-lease result. Verify current classifications, rates, permits, and accounts.

Common questions

Q: Was a 180-day-or-shorter contract taxable?

A: Yes, as a motor vehicle rental.

Q: What about one contract over 180 days?

A: The letter treated it as a lease without motor vehicle rental tax.

Citations and references

  • The letter cited no statute or administrative rule by number.

Source

Original ruling text

February 12, 1991

Dear **:

Thank you for your letter regarding the taxability of your client's
rental of a trailer.

Based on your letter and our telephone conversation, I understand
your client rents out a trailer with an empty water tank attached,
and that this trailer is a licensed motor vehicle. If your client's
contract is for a period of 180 days or less, then this is a rental
of a motor vehicle and 6% motor vehicle rental tax should be collected
by your client and remitted to the state. Your client would then also
apply for a motor vehicle rental tax account. Enclosed is a Motor
Vehicle Rental Tax Application.

If your client enters into a single contract in excess of 180 days,
then the transaction is considered a lease and no motor vehicle
rental tax would be due.

If you have any questions, please don't hesitate to call toll free
at 1-800-252-5555.

Sincerely,

Joan Hale
Tax Administration Division

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