Ezel / Tax Rulings / TX
TX 9809826L Motor Vehicle Tax 1998-09-10

Did a Chapter 42 child-care license by itself qualify a Texas facility's van purchase for motor vehicle sales tax exemption?

Short answer: No. A Chapter 42 license alone was not enough. The facility also had to qualify to provide the specified 24-hour residential care for children, including the described groups that did not need specialized services or were emotionally disturbed. Documentation of that additional status was required at licensing and titling.

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This page answers the general question as of 1998. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1998
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller letter issued on a specific facility's proposed van purchase. It dates from 1998, predates modern Private Letter Ruling reliance terms, and cannot be treated by unrelated organizations as binding protection. Agency names, Chapter 42 licensing, residential-care categories, Tax Code requirements, and titling proof may have changed, so verify current licensing and tax law. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller said a child-care facility's Chapter 42 license alone did not qualify its van purchase for motor vehicle sales tax exemption.

The facility also had to be licensed to provide 24-hour residential care to children who did not require specialized services or treatment and to emotionally disturbed children who could live together in one residential group. The letter said many facilities held Chapter 42 licenses but few met this additional Tax Code condition.

If the facility qualified, it had to present documentation of that status when licensing and titling the van.

What this means for you

Child-care and residential facilities

Confirm both the general license and the narrower residential-care qualification before claiming the vehicle exemption.

Nonprofit accountants and fleet managers

Keep the agency documentation ready for the title transaction.

Common questions

Q: Was a Chapter 42 license enough?

A: No.

Q: What additional status was required?

A: Qualification for the specific 24-hour residential child-care described in the letter.

Q: When was proof presented?

A: At licensing and titling.

Citations and references

  • Texas Human Resources Code Chapter 42
  • Texas Tax Code residential-care exemption requirement; the letter did not identify a section number.

Source

Original ruling text

September 10, 1998

Dear **:

Thank you for your letter concerning the ABC's possible exemption from Texas
motor vehicle sales tax.

The purchase of the van will qualify for exemption if the ABC is not only
licensed by the Texas Department of Protective and Regulatory Services under
Chapter 42 of the Texas Human Resources Code, but also to provide residential
care 24 hours a day to children who do not require specialized services or
treatment, and children who are emotionally disturbed who may live together in
a single residential group. It is my understanding that although many
facilities are licensed under Ch. 42, few facilities meet the additional Tax
Code requirement.

If the ABC's facility does qualify for the additional requirement under the Tax
Code please present documentation of that qualification at the time of
licensing and titling.

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

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

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