What determined whether a service member bringing an overseas-purchased vehicle to Texas received ordinary use tax or new-resident treatment?

Plain-English summary

The Texas Comptroller said a vehicle bought outside Texas and later operated in the state was subject to motor vehicle use tax.

For military personnel, the letter treated Texas as the relevant residence when Texas was the service member's home of record. That person received ordinary resident treatment rather than the new-resident alternative.

To qualify as a new resident, the title applicant had to be newly resident in Texas and the vehicle had to have been permanently registered to that person elsewhere.

The letter quoted a 6 1/4% use-tax rate, a $15 new-resident amount, and no local tax on motor vehicle purchases. STAR expressly warns that the quoted rates are obsolete.

What this means for you

Military personnel

The historical answer turned on home of record, not merely where the person was stationed or bought the vehicle.

Vehicle importers

The prior permanent registration condition was separate from the person's new-resident status.

Relocation advisers

Verify the service member's home of record and the vehicle's registration history before applying a residency rule.

Common questions

Q: What if Texas was the service member's home of record?

A: The ordinary use tax applied under the letter.

Q: What did new-resident treatment require?

A: A new Texas resident and prior permanent registration of the vehicle to that person elsewhere.

Q: Are the quoted rates current?

A: No. STAR expressly warns that they are obsolete.

Citations and references

• Texas Tax Code motor vehicle use tax and new-resident provisions; the letter did not identify section numbers.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/9808825L

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.

August 18, 1998

Dear **:

Thank you for your email concerning the taxability of a vehicle purchased

overseas and then brought into this state.

The Tax Code does impose a use tax on a motor vehicle purchased out of state

and then operated in Texas. Generally, a 6 1/4% state tax is due calculated on

your purchase price. There is no local tax imposed on motor vehicle purchases.

This is the appropriate tax for purchases by Texas residents including

military personnel with Texas as the home of record.

A new resident to Texas may qualify for a $15 new resident use tax in lieu of

the 6 1/4%. In order to qualify for the new resident provision the title

applicant must be a new resident to Texas and the vehicle must have been

registered (permanent registration) to that person elsewhere.

This opinion is based on the information presented. If there is additional

information, the opinion could change.

If you have any questions, please feel free to contact this office. From

within the US, you may contact one of our tax specialist by calling

1-800-252-1382, toll free.

Sincerely,

Curt Swenson

Tax Policy Division