Could a nonresident servicemember use Texas's historical new-resident vehicle tax instead of ordinary use tax?

Plain-English summary

The Texas Tax Administration Division said ordinary use tax applied when an out-of-state-purchased vehicle entered Texas for highway use. Tax was based on original purchase price, with credit for similar tax legally due and paid to another state but not a foreign country.

A military servicemember could qualify for the historical new-resident tax instead if the military home of record was outside Texas and the vehicle had already been registered in the servicemember's name in another state or country.

The separate registration fee was administered by the transportation agency. STAR warns that the historical 6.25% rate and $15 new-resident amount are obsolete.

What this means for you

Military service members

The historical alternative depended on home of record and prior registration, not military status alone.

Registration and military tax professionals

Other-state tax credit and foreign-country registration were treated differently.

Common questions

Q: Did ordinary use tax allow another-state credit?

A: Yes.

Q: Did foreign-country tax receive that credit?

A: No, under the letter.

Q: Are the stated rates current?

A: No.

Citations and references

• 34 Tex. Admin. Code Rules 3.61, 3.68, and 3.71 — enclosed for the historical treatment.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/9203L1159E13

Original ruling text

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

March 10, 1992

Dear **:

Thank you for your recent letter regarding motor vehicle tax.

You stated that you will be transferred in August 1992 to
Goodfellow Air Force Base in the San Angelo area. You will be
registering a vehicle here that was purchased outside Texas and
asked what tax will be due in Texas. You mentioned that you are a
non-resident military servicemember.

A vehicle purchased outside Texas and later brought into this
state for use upon the highways is subject to the 6 1/4% motor
vehicle use tax which is based on the original purchase price of
the vehicle. Credit is allowed to offset the use tax by a similar
tax that was legally due and paid to another state (but not to a
foreign country).

If your military "home of record" is a state other than Texas, and
the vehicle brought into Texas is registered in your name in
another state or foreign country, you may qualify for the "new
resident" tax of $15 per vehicle in lieu of the 6 1/4% use tax.

I am enclosing Rules 3.61, 3.68 and 3.71 for your reference.

In addition to any tax that may be due on the vehicle, there will
also be a registration fee which is administered by the Texas
Department of Transportation. I will forward a copy of your
letter to that agency who will respond to those fees.

This opinion is based on the facts presented. Different facts,
though similar, might lead to different answers. If you have any
questions, you may write or call me from anywhere within the
United States at 1-800-531-5441, ext. 5-0330, or 512/463-4600.

Sincerely,

Bettie Peterson
Tax Administration Division