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Used Car Buyers Likely To Pay More Today
State Law Sets New Minimum Tax Due For Title Transfers
HOUSTON– September 29, 2006 – Harris County Tax Assessor-Collector Paul Bettencourt today announces the state’s new tax changes for buyers of used motor vehicles. HB 4, enacted by the 79th Legislature, 3rd Called Session, becomes effective October 1, 2006 changing the method to calculate motor vehicle sales and use tax due for the purchase of a used vehicle and vehicles brought into Texas for use. The tax is estimated to generate over $30 million for the state over two years.
“So, what happens to the taxpayer? They’re probably going to pay more,” said Bettencourt. “It’s a new kind of sticker shock for taxpayers when registering and titling their pre-owned vehicles after October 1. Standard Presumptive Value will likely increase what taxpayers pay, which is a tax on no less than 80% of the value of their vehicle.”
| How much tax is due with these new changes? |
| For a vehicle purchase made through a private party, such as a friend or relative, the tax is 6.25% of: |
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the sales price, if the buyer paid 80% or more of the vehicle’s Standard Presumptive Value* (SPV);
80% of the vehicle’s Standard Presumptive Value, if the buyer paid less than that amount; or
the certified appraised value, if the buyer paid less than 80% of the vehicle’s SPV and a certified appraisal is obtained (appraisal must be submitted with title application within 20 county working days of purchase or the date the vehicle was brought into Texas for use).
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| * The Texas Department of Transportation (TxDOT) is required by law to determine and publish the Standard Presumptive Value of a vehicle on their Web site at www.txdot.gov. |
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"Like with any other potential tax increase, do your homework to pay the lowest legal amount of tax possible. Visit the Tax Office Web site at www.hcauto.net and use the site’s SPV calculator to estimate the tax you will owe. If you believe that your vehicle’s value is less than what TxDOT has published, get a certified appraisal of your vehicle, but you have only 20 county working days from the date of purchase to get it!" said Bettencourt. "Any refunds will be handled by the State Comptroller’s Office, not the Tax Office, so used car buyers need to get it right the first time."
A list of vehicles that are excluded from the SPV used motor vehicle sales and use tax is available on the Tax Office Web site at www.hcauto.net. For help or information, call the Tax Office at 713-368-2000.
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