How did Texas treat temporary paper license plates and window-tint stickers for sales tax, and what changed in 2025?

Plain-English summary

The STAR record now leads with a statutory change: effective July 1, 2025, House Bill 718 eliminated dealer-issued temporary paper buyer, dealer, and converter tags and required dealers to issue metal plates obtained from TxDMV.

Before that change, the 1997 letter distinguished two paper tags. A red-letter temporary plate transferred with the sold vehicle could be purchased for resale when the dealer held a sales-tax permit and gave the supplier a resale certificate. A black-letter temporary plate that did not transfer with the sale could not.

The letter separately addressed window-tint compliance stickers. A tint shop that combined labor and material was the sticker's consumer and paid tax to its supplier. It could buy stickers for resale only if it separately stated its customer charges.

What this means for you

Motor vehicle dealers and tag suppliers

Do not use the old paper-tag distinction for transactions after the effective date in STAR's alert. Follow the metal-plate process under House Bill 718 and current TxDMV rules.

Window-tint shops

The historical letter tied resale treatment to separately stated customer charges. Verify current Texas rules before relying on this 1997 response.

Common questions

Q: Can dealers still issue the temporary paper tags discussed here?

A: STAR says no from July 1, 2025; House Bill 718 replaced them with TxDMV metal plates.

Q: What was the old red-letter tag rule?

A: Because it transferred with the vehicle, a permitted dealer could buy it for resale using a resale certificate.

Q: When could tint stickers be bought for resale?

A: Under the old letter, when the shop separately stated its charges to the customer.

Citations and references

• Texas House Bill 718, 88th Legislature (effective July 1, 2025)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/9710973L

Original ruling text

ALERT: House Bill 718 (88th Leg. Session, 2023) requires a motor vehicle dealer to issue metal license plates obtained from the Texas Department of Motor Vehicles (TxDMV) for vehicles sold by the dealer and eliminates the issuance of temporary paper buyer's, dealer’s, and converters tags. Effective 07/01/2025.

October 23, 1997

Dear Sir:

Thank you for your letter concerning the taxability of temporary paper license

plates and window tint compliance stickers.

The temporary red lettered paper license plate that is transferred with the

sale of a motor vehicle may be purchased by a dealer for resale. The dealer

must have a state limited sales tax permit and issue provide to you a resale

certificate. The black lettered temporary paper plate may not be purchased for

resale since it is not conveyed with the sale of the vehicle.

Typically, window tint shops do not separate the charges for labor and

material. In that situation they are the consumer of the material and should

pay tax to their supplier. The window tint shop may only purchase the stickers

for resale it they separate their charges to their customer.

This opinion is based on the facts presented. If there are additional or

different facts, the opinion could change.

If you have any questions, please don't hesitate to write the Tax Policy

Division or call one of our tax specialist toll free at 1-800-252-1382.

Sincerely,

Curt Swenson

Tax Policy Division