Could a person who was already a Texas resident and also a resident of another state claim Texas's new-resident vehicle tax?

Plain-English summary

The Texas Comptroller said a person could be a resident of more than one state for motor vehicle tax purposes, even though domicile could exist in only one place.

But a person who was already a Texas resident and also resident elsewhere could not claim the new-resident vehicle provision. The 1998 letter reserved that alternative for a new Texas resident who had purchased and registered the vehicle outside Texas.

Registering to vote and establishing a dwelling in Texas were listed as indicators of becoming a resident. Administrative Rule 3.71 supplied additional definitions of resident and new resident.

The letter also quoted a 6 1/4% sales/use rate and a $15 new-resident amount. STAR expressly warns that those figures are obsolete.

What this means for you

Multistate residents

Having residence connections to another state did not erase existing Texas residence for the new-resident rule.

Relocation advisers

Review when Texas residence began, where the vehicle was purchased and registered, voting registration, and the establishment of a Texas dwelling.

County tax assessor-collectors

The historical rule focused on actual new-resident status, not simply presentation of another state's registration.

Common questions

Q: Could a person be resident in Texas and another state?

A: Yes, for this tax.

Q: Could that existing Texas resident claim new-resident treatment?

A: No.

Q: What residency indicators did the letter name?

A: Registering to vote and establishing a Texas dwelling.

Q: Are the quoted rates current?

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

Citations and references

• Texas Motor Vehicle Sales Tax Administrative Rule 3.71

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/9808827L

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 26, 1998

Dear **:

Recently, we spoke about the application of Texas motor vehicle sales or use
tax on motor vehicles owned by Texas residents. Some of the vehicle owners may
also be residents of New Mexico.

As you are aware, the purchase of a motor vehicle in Texas by a resident of
this state is subject to motor vehicle sales tax (6 1/4%). A Texas resident
who purchases a vehicle in another state and then operates that vehicle into
this state is subject motor vehicle use tax at a rate of 6 1/4% of the purchase
price. Although a person may be domiciled at only one location, for purposes
of this tax, a person may be a resident of more than one state. A new resident
to this state who purchased and registered a motor vehicle outside of this
state may be eligible for the $15 new resident use tax in lieu of the 6 1/4%
use tax. A person who is a resident of Texas and another state is not eligible
for the new resident provision.

Indicators of becoming a new resident includes registering to vote or
establishing a dwelling in this state.

Motor Vehicle Sales Tax Administrative Rule 3.71, Definition of "Resident" and
"New Resident", provides additional information.

If you have any questions, please contact one of our tax specialist by calling
1-800-252-1382, toll free.

Sincerely,

Curt Swenson
Tax Policy Division