Should a vehicle rebate be subtracted before reporting the sales price on line 21(a) of Texas Form 130-U?

Plain-English summary

The Texas Tax Administration Division changed its prior instruction after recent property-tax legislation and allowed a vehicle rebate to be subtracted before reporting the sales price on line 21(a) of the title and tax application.

The letter's example started with a $20,000 price and a $1,000 rebate, producing a $19,000 line 21(a) amount.

The attached request explained that jurisdictions had been handling rebates inconsistently and asked for clarification.

What this means for you

Motor vehicle dealers and title staff

The historical instruction used the post-rebate net amount on the stated form line.

Vehicle inventory tax professionals

This was a 1994 form-completion clarification and should not be assumed to match current forms or statutes.

Common questions

Q: Was the rebate subtracted first?

A: Yes.

Q: What amount did the example report?

A: $19,000 after a $1,000 rebate from a $20,000 initial price.

Citations and references

• The letter did not identify a statute or administrative rule by number.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/9402316L

Original ruling text

February 25, 1994

Dear Ms. **:

This is in follow-up to our conversation and your letter concerning the dollar
sales figure that should be shown as sales price (line 21(a)) on the motor
vehicle Application for Texas Certificate of Title/Tax Statement.

In the past we have asked that the sales price shown on line 21(a) of the
application be the amount to be paid before rebate amount is credited. The
recent property tax legislation has affected that instruction.

It is acceptable that any rebate first be subtracted before the dollar amount
is computed for line 21(a) of the application. For example, if the initial
price is $20,000 and then a $1000 rebate is available, line 21(a) should
reflect the $19,000 net figure.

If you have any questions please do not hesitate to call.

Sincerely,

Curt Swenson
Tax Administration Division

February 25, 1994

Mr. Curt Swenson
Tax Policy Section
Tax Administration Division
Comptroller of Public Accounts
Austin, TX 78774

Dear Mr. Swenson:

In accordance with prior conversations regarding rebates and the calculation of
the Vehicle Inventory Tax, it is my understanding that the dealer is to deduct
the rebate prior to completing the amount on the Application for Title, or Form
130-U, line 21(a).

However, it has come to my attention that the "Motor Vehicle Tax Guidebook"
states that the rebate should be shown on the Application for Texas Certificate
of Title and written in the space provided for the trade-in.

Since there is no sales tax calculated on the rebate, and because there has
never been a line provided by the state for the showing of the rebate on any
state form, and because different jurisdictions have required the completion of
the form with and without the showing of the rebate, a clarification of this
issue is appreciated.

If you need any additional information, please do not hesitate to contact me at
**.

Sincerely,

Chief Counsel