Is Texas sales tax or motor vehicle tax due on motorcycle accessories, and does it matter whether the accessory is attached to the motorcycle or bought separately?

Plain-English summary

A trade association asked the Comptroller's office about the proper tax treatment of accessories sold along with motorcycles and all-terrain vehicles (ATVs). The Comptroller's response set out a few general principles.

If a street-legal motorcycle is purchased along with an accessory that is attached to it — the example given is a luggage rack — both the motorcycle and the attached accessory are subject to motor vehicle sales tax. But if the accessory is not attached to the motorcycle at the time of purchase (for example, a helmet or gloves), it is instead subject to limited sales tax, meaning the 6-1/4% state rate plus any applicable local tax. An accessory bought entirely on its own, apart from any vehicle purchase, is likewise subject to limited sales tax.

For all-terrain vehicles, the rule is simpler: accessories purchased along with an ATV are subject to limited sales tax, just as the ATV itself is.

What this means for you

Motorcycle and ATV dealers

Whether you charge motor vehicle sales tax or limited (state and local) sales tax on an accessory depends on whether it is attached to a street-legal motorcycle at the point of sale. Attached accessories sold with the motorcycle follow the motorcycle's motor vehicle tax treatment; unattached accessories, and any accessory sold by itself, are taxed under the limited sales tax rules instead. For ATVs, both the vehicle and any accessories sold with it are taxed under limited sales tax.

Buyers of motorcycles, ATVs, and accessories

If you buy a motorcycle with an accessory already attached (like a luggage rack), expect it to be taxed together with the vehicle. If you buy an accessory that isn't attached — a helmet, gloves, or anything purchased separately — expect it to be taxed at the state's 6-1/4% limited sales tax rate plus local tax, rather than as part of the vehicle sale.

Accountants and tax professionals

This letter is useful as a short statement of the Comptroller's dividing line between motor vehicle sales tax and limited sales tax for vehicle accessories: attachment status at the time of purchase (for street-legal motorcycles) is the deciding factor, while ATV accessories are always limited-sales-tax items regardless of attachment.

Common questions

Q: Is a luggage rack attached to a motorcycle at the time of sale taxed the same as the motorcycle?
A: Yes. An accessory attached to a street-legal motorcycle when purchased is subject to motor vehicle sales tax along with the motorcycle itself.

Q: What tax applies to a helmet or gloves bought with a motorcycle but not attached to it?
A: Limited sales tax — the 6-1/4% state rate plus any applicable local tax — rather than motor vehicle sales tax.

Q: Does it matter if an accessory is purchased entirely on its own, without a vehicle?
A: No change in outcome for unattached-type accessories: an accessory purchased by itself is also subject to limited sales tax.

Q: How are accessories purchased with an all-terrain vehicle taxed?
A: Accessories purchased with ATVs are subject to limited sales tax, the same as the ATV itself.

Citations and references

No specific statutes or administrative rules are cited in the text of this letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9409L1314D14

Original ruling text

September 27, 1994

Dear **:

Recently we spoke concerning the proper application of tax on accessory
purchases.

Your members should keep in mind a couple of general principles when
determining the taxability of accessories.

First, the purchase of a motorcycle designed for street use and the concurrent
purchase of an accessory that is attached to that motorcycle are both subject
to motor vehicle sales tax. The purchase of a motorcycle along with an attached
luggage rack is an example.

Accessories purchased along with a street-legal motorcycle that are not
attached to the motorcycle (e.g., a helmet or gloves) are subject to limited
sales tax, including the 6-1/4% state rate plus any appropriate local tax. Of
course, an accessory purchased by itself is also subject to limited sales tax.

Accessories purchased with all terrain vehicles are subject to limited sales
tax, as is the vehicle.

Any time this office may be of assistance, please do not hesitate to contact
us. One of our representatives in Tax Assistance may be reached by calling toll
free 1-800-252-1382. Our regular number is 512-463-4600.

Sincerely,

Curt Swenson
Tax Administration Division

NOTE: Previous Accession Number 9409568L