TX 9901085L Motor Vehicle Tax 1999-01-11

Who collected Texas motor vehicle tax when a business sold high-pressure cleaning equipment mounted on flatbed utility trailers?

Short answer: The entire trailer-plus-equipment charge was subject to motor vehicle sales tax even when separately stated. Under the 1999 rules, a seller of at least five motor vehicles in 12 months needed a dealer license and collected the tax; a smaller nondealer seller supplied the customer with documents to title the trailer and pay the county.

Apply this to your situation

This page answers the general question as of 1999. Ezel answers yours, under current Texas tax law, with citations.

Disclaimer: This is an official Texas Comptroller letter issued on the specific sales structure presented. It dates from 1999, predates modern Private Letter Ruling reliance terms, and cannot be treated by unrelated taxpayers as binding protection. The 6.25% rate, five-vehicle licensing threshold, agency jurisdiction, forms, collection duties, and § 152.0411 may have changed, so verify current Texas rules. 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 treated a flatbed utility trailer carrying installed high-pressure cleaning equipment as a motor vehicle with attachments.

The entire charge for the trailer and equipment was subject to the 6.25% motor vehicle sales tax quoted in the 1999 letter, even if the invoice listed the components separately.

Collection responsibility depended on dealer-licensing status. The Texas Department of Transportation told the Comptroller that selling at least five motor vehicles in a 12-month period required a dealer license. Under § 152.0411, a licensed dealer collected the tax and submitted it to the county with the registration paperwork.

A seller below that threshold that did not need a dealer license did not collect the customer's motor vehicle tax. It still had to give the customer the documents needed to transfer title and pay the county, including the described title application and manufacturer's certificate of origin.

What this means for you

Equipment manufacturers and trailer dealers

Separately stating the equipment did not separate it from the trailer's motor vehicle tax base when sold already attached.

Industrial cleaning companies

Under the historical rule, the number of motor vehicles sold during 12 months determined whether dealer collection duties applied.

County tax assessor-collectors

Customers of a nondealer seller paid the tax during title transfer using the documents furnished by the seller.

Common questions

Q: Was a utility trailer a motor vehicle?

A: Yes, according to the letter.

Q: Did separately stated cleaning equipment escape motor vehicle tax?

A: No.

Q: When did the seller collect tax?

A: When dealer licensing was required under the 1999 five-sales-in-12-months threshold.

Q: What did a nondealer seller provide?

A: The documents the customer needed to transfer title and pay tax to the county.

Citations and references

Tex. Tax Code § 152.0411

Source

STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
Opinion: https://star.comptroller.texas.gov/view/9901085L

Original ruling text

January 11, 1999

Dear Ms. **:

Thank you for your request for motor vehicle tax information.

Your company is a sales and service center for industrial cleaning equipment.
You assemble high-pressure cleaning equipment on flat bed utility trailers for
resale. On the invoice, you itemize the cleaning equipment and the trailer
separately. You provide your customer with a certificate of origin for a
vehicle, a form 130-U, and the gross and empty weight of the trailer. The
customer then tags and titles the trailer. You ask who is responsible for
collecting the motor vehicle sales tax on the trailer.

Response: Utility trailers are motor vehicles. When you attach cleaning
equipment onto a flat bed utility trailer, you now have a motor vehicle with
attachments. The Texas Department of Transportation (TxDOT) has informed us
that if you sell at least five (5) motor vehicles within a twelve (12) month
period, you must apply for a dealer's license with the Texas Department of
Transportation. Section 152.0411 of the Tax Code, requires motor vehicle
dealers to collect motor vehicle sales tax and submit it to the county at the
time the registration paperwork is submitted. This responsibility was added by
the Legislature in 1995 (effective January 1, 1996). If you do not sell at
least five motor vehicles within a twelve month period, and are not required to
obtain a dealer's license from TxDOT, you are not required to collect the
motor vehicle tax from your customer. You must, however, furnish the customer
everything the customer needs (e.g., 130-U, MCO) to transfer the title and pay
the tax to the county.

The proper tax you should collect is 6.25% motor vehicle sales tax on the
entire charge for the trailer and attached equipment (even if separately stated
on the invoice).

This opinion is based on the information presented. If there are additional or
different facts, the opinion could change.

If you have any questions, please do not hesitate to call me toll free at
1-800-531-5441, extension 34663. My direct number is 512/463-4663. You may
also write to Tax Policy Division, Comptroller of Public Accounts. For dealer
licensing requirements, please contact TxDOT, Motor Vehicle Division, at
512/416-4885.

Sincerely,

Joan Hale
Tax Policy Division

cc: Martin Hinojosa, **

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