Texas Tax Code

Sec. § 23.122
Prepayment of Taxes by Certain Taxpayers

(a)

In this section:

(1)

“Aggregate tax rate” means the combined tax rates of all relevant taxing units authorized by law to levy property taxes against a dealer’s motor vehicle inventory.

(2)

“Chief appraiser” has the meaning given it in Section 23.121 (Dealer’s Motor Vehicle Inventory; Value) of this code.

(3)

“Collector” has the meaning given it in Section 23.121 (Dealer’s Motor Vehicle Inventory; Value) of this code.

(4)

“Dealer’s motor vehicle inventory” has the meaning given it in Section 23.121 (Dealer’s Motor Vehicle Inventory; Value) of this code.

(5)

“Declaration” has the meaning given it in Section 23.121 (Dealer’s Motor Vehicle Inventory; Value) of this code.

(6)

“Owner” has the meaning given it in Section 23.121 (Dealer’s Motor Vehicle Inventory; Value) of this code.

(7)

“Relevant taxing unit” means a taxing unit, including the county, authorized by law to levy property taxes against a dealer’s motor vehicle inventory.

(8)

“Sales price” has the meaning given it in Section 23.121 (Dealer’s Motor Vehicle Inventory; Value) of this code.

(9)

“Statement” means the Dealer’s Motor Vehicle Inventory Tax Statement filed on a form promulgated by the comptroller as required by this section.

(10)

“Subsequent sale” has the meaning given it in Section 23.121 (Dealer’s Motor Vehicle Inventory; Value) of this code.

(11)

“Total annual sales” has the meaning given it in Section 23.121 (Dealer’s Motor Vehicle Inventory; Value) of this code.

(12)

“Unit property tax factor” means a number equal to one-twelfth of the prior year aggregate tax rate at the location where a dealer’s motor vehicle inventory is located on January 1 of the current year.

(b)

Except for a vehicle sold to a dealer, a vehicle included in a fleet transaction, or a vehicle that is the subject of a subsequent sale, an owner or a person who has agreed by contract to pay the owner’s current year property taxes levied against the owner’s motor vehicle inventory shall assign a unit property tax to each motor vehicle sold from a dealer’s motor vehicle inventory. The unit property tax of each motor vehicle is determined by multiplying the sales price of the motor vehicle by the unit property tax factor. On or before the 10th day of each month the owner shall, together with the statement filed by the owner as required by this section, deposit with the collector a sum equal to the total of unit property tax assigned to all motor vehicles sold from the dealer’s motor vehicle inventory in the prior month to which a unit property tax was assigned. The money shall be deposited by the collector in or otherwise credited by the collector to the owner’s escrow account for prepayment of property taxes as provided by this section. An escrow account required by this section is used to pay property taxes levied against the dealer’s motor vehicle inventory, and the owner shall fund the escrow account as provided by this subsection.

(c)

The collector shall maintain the escrow account for each owner in the county depository. The collector is not required to maintain a separate account in the depository for each escrow account created as provided by this section but shall maintain separate records for each owner. The collector shall retain any interest generated by the escrow account to defray the cost of administration of the prepayment procedure established by this section. Interest generated by an escrow account created as provided by this section is the sole property of the collector, and that interest may be used by no entity other than the collector. Interest generated by an escrow account may not be used to reduce or otherwise affect the annual appropriation to the collector that would otherwise be made.

(d)

The owner may not withdraw funds in an escrow account created pursuant to this section.

(e)

The comptroller shall promulgate a form entitled a Dealer’s Motor Vehicle Inventory Tax Statement. Each month, a dealer shall complete the form regardless of whether a motor vehicle is sold. A dealer may use no other form for that purpose. The statement may include the information the comptroller deems appropriate but shall include at least the following:

(1)

a description of each motor vehicle sold;

(2)

the sales price of the motor vehicle;

(3)

the unit property tax of the motor vehicle if any; and

(4)

the reason no unit property tax is assigned if no unit property tax is assigned.

(f)

On or before the 10th day of each month a dealer shall file with the collector the statement covering the sale of each motor vehicle sold by the dealer in the prior month. On or before the 10th day of a month following a month in which a dealer does not sell a motor vehicle, the dealer must file the statement with the collector and indicate that no sales were made in the prior month. A dealer shall file a copy of the statement with the chief appraiser and retain documentation relating to the disposition of each motor vehicle sold. A chief appraiser or collector may examine documents held by a dealer as required by this subsection in the same manner, and subject to the same provisions, as are set forth in Section 23.121 (Dealer’s Motor Vehicle Inventory; Value)(g).

(g)

The requirements of Subsection (f) of this section apply to all dealers, without regard to whether or not the dealer owes vehicle inventory tax for the current year. A dealer who owes no vehicle inventory tax for the current year because he was not in business on January 1 may neither assign a unit property tax to a motor vehicle sold by the dealer nor remit money with the statement unless pursuant to the terms of a contract as provided by Subsection (l) of this section.

(h)

A collector may establish a procedure, voluntary or mandatory, by which the unit property tax of a vehicle is paid and deposited into an owner’s escrow account at the time of processing the transfer of title to the motor vehicle.

(i)

A relevant taxing unit shall, on its tax bill prepared for the owner of a dealer’s motor vehicle inventory, separately itemize the taxes levied against the dealer’s motor vehicle inventory. When the tax bill is prepared by a relevant taxing unit for a dealer’s motor vehicle inventory, the assessor for the relevant taxing unit, or an entity, if any, other than the collector, that collects taxes on behalf of the taxing unit, shall provide the collector a true and correct copy of the tax bill sent to the owner, including taxes levied against the dealer’s motor vehicle inventory. The collector shall apply the money in the owner’s escrow account to the taxes imposed and deliver a tax receipt to the owner. The collector shall apply the amount to each relevant taxing unit in proportion to the amount of taxes levied, and the assessor of each relevant taxing unit shall apply the funds received from the collector to the taxes owed by the owner.

(j)

If the amount in the escrow account is not sufficient to pay the taxes in full, the collector shall apply the money to the taxes and deliver to the owner a tax receipt for the partial payment and a tax bill for the amount of the deficiency together with a statement that the owner must remit to the collector the balance of the total tax due.

(k)

The collector shall remit to each relevant taxing unit the total amount collected by the collector in deficiency payments. The assessor of each relevant taxing unit shall apply those funds to the taxes owed by the owner. Taxes that are due but not received by the collector on or before January 31 are delinquent. Not later than February 15 the collector shall distribute to relevant taxing units in the manner set forth in this section all funds collected pursuant to the authority of this section and held in escrow by the collector as provided by this section. This section does not impose a duty on a collector to collect delinquent taxes that the collector is not otherwise obligated by law or contract to collect.

(l)

A person who acquires the business or assets of an owner may, by contract, agree to pay the current year vehicle inventory taxes owed by the owner. The owner who owes the current year tax and the person who acquires the business or assets of the owner shall jointly notify the chief appraiser and the collector of the terms of the agreement and of the fact that the purchaser has agreed to pay the current year vehicle inventory taxes owed by the selling dealer. The chief appraiser and the collector shall adjust their records accordingly. Notwithstanding the terms of Section 23.121 (Dealer’s Motor Vehicle Inventory; Value) of this code, a person who agrees to pay current year vehicle inventory taxes as provided by this subsection is not required to file a declaration until the year following the acquisition. This subsection does not relieve the selling owner of tax liability.

(m)

A dealer who fails to file a statement as required by this section commits an offense. An offense under this subsection is a misdemeanor punishable by a fine not to exceed $100. Each day during which a dealer fails to comply with the terms of this subsection is a separate violation.

(n)

In addition to other penalties provided by law, a dealer who fails to file or fails to timely file a statement as required by this section shall forfeit a penalty. A tax lien attaches to the dealer’s business personal property to secure payment of the penalty. The appropriate district attorney, criminal district attorney, county attorney, collector, or person designated by the collector shall collect the penalty established by this section in the name of the collector. Venue of an action brought under this subsection is in the county in which the violation occurred or in the county in which the owner maintains the owner’s principal place of business or residence. A penalty forfeited under this subsection is $500 for each month or part of a month in which a statement is not filed or timely filed after it is due.

(o)

An owner who fails to remit unit property taxes due as required by this section shall pay a penalty of five percent of the amount due. If the amount is not paid within 10 days after the due date, the owner shall pay an additional penalty of five percent of the amount due. Notwithstanding the terms of this section, unit property taxes paid on or before January 31 of the year following the date on which they are due are not delinquent. The collector, the collector’s designated agent, or the county or district attorney shall enforce the terms of this subsection. A penalty under this subsection is in addition to any other penalty provided by law if the owner’s taxes are delinquent.

(p)

Fines collected pursuant to the authority of this section shall be deposited in the county depository to the credit of the general fund. Penalties collected pursuant to the authority of this section are the sole property of the collector, may be used by no entity other than the collector, and may not be used to reduce or otherwise affect the annual appropriation to the collector that would otherwise be made.
Added by Acts 1993, 73rd Leg., ch. 672, Sec. 4, eff. Jan. 1, 1994. Renumbered from Tax Code Sec. 23.12B by Acts 1995, 74th Leg., ch. 76, Sec. 17.01(47), eff. Sept. 1, 1995. Renumbered from Tax Code Sec. 23.12B and amended by Acts 1995, 74th Leg., ch. 945, Sec. 3, eff. Jan. 1, 1996; Amended by Acts 1997, 75th Leg., ch. 321, Sec. 4 to 7, eff. May 26, 1997.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 116 (H.B. 2071), Sec. 2, eff. September 1, 2009.
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Jun. 7, 2021

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