No taxes on new build?

[Ronbo]

Sorry, your getting bad advice. Texas is like most other states, a sales/use tax system. Out of state purchases are your resposibility to pay sales tax on.

Typically you just bring all this stuff (receipts) to the DMV and pay what taxes are due on the major components (engine, trans, body and frame).

Unless your building it for resale (like GM, Ford, ect.), the taxes are due. No point fooling around with the tax people, the penalties are murder. (typically double the original tax + 1~1.5% per mo.)

Sorry if I'm ignorant of some loophole in the Texas tax codes but I just checked this stuff on your state's dept of revenue site.

[damdfw]

It's not a loophole. One of the employees at my local license office was very familiar with the law and you can look up the Texas law for yourself online.

The law states: (Example is a truck being built)

The taxpayer pays Limited sales and use tax on each part or accessory ordered to build a motor vehicle. No motor vehicle tax is due when the taxpayer (builder) initially titles the truck.

NOTE: The only time motor vehicle tax is not due on a homemade motor vehicle is when the vehicle is initially titled by the person who actually built it. Once a vehicle has been titled or registered by the person who built it, motor vehicle tax is due on all subsequent sales.


It goes on to say if you custom order a car to be built then you do pay tax because you are not the builder.

When I registered my car, I provided the green sheet (inspection), a copy of the receipts for the rolling chassis, engine, transmission and the original MSO. I then wrote a check for $105.30.

[elmariachi]

Originally Posted by Ronbo

Typically you just bring all this stuff (receipts) to the DMV and pay what taxes are due on the major components (engine, trans, body and frame). Unless your building it for resale (like GM, Ford, ect.), the taxes are due. No point fooling around with the tax people, the penalties are murder. (typically double the original tax + 1~1.5% per mo.)

Not correct.

1. If you buy parts from an entity who holds a Texas sales and use tax certificate (like a business) then you will pay 8.25% sales tax on any parts and components you purchase in the state of Texas for your build. You are not taxed again on these parts when you register the finished car.

2. If you buy goods for your build from out of state, Texas has a sales/use tax requirement that says you are obligated to pay sales tax on that as well. The local tag office will NOT attempt to collect that, you must file form 01-156, Texas Occasional Use Tax. (Would all the idiots who are filling out this form and voluntarily paying sales tax on the Rolexes you bought in Mexico please stand up?) I would like to meet one Texas resident who has EVER filled out and filed this form.

3. When you go to title and register your car, if you BUILT it, you do not have to pay sales tax on any of the parts or the car itself because you are the builder. You do NOT pay tax on the engine, frame or body. The local tag office is not even set up to collect the sales/use tax anyway, it has to be filed on the above mentioned form.

4. If you attempt to register a roller (Superformance, Backdraft, etc) you will be asked to show your MSO and your bill of sale for the roller. If you did not pay sales tax on the roller, you WILL pay 6.25% Texas vehicle sales tax on the roller at the time of registration.

[Stoney FFR]

Originally Posted by elmariachi

Not correct.

1. If you buy parts from an entity who holds a Texas sales and use tax certificate (like a business) then you will pay 8.25% sales tax on any parts and components you purchase in the state of Texas for your build. You are not taxed again on these parts when you register the finished car.

2. If you buy goods for your build from out of state, Texas has a sales/use tax requirement that says you are obligated to pay sales tax on that as well. The local tag office will NOT attempt to collect that, you must file form 01-156, Texas Occasional Use Tax. (Would all the idiots who are filling out this form and voluntarily paying sales tax on the Rolexes you bought in Mexico please stand up?) I would like to meet one Texas resident who has EVER filled out and filed this form.

3. When you go to title and register your car, if you BUILT it, you do not have to pay sales tax on any of the parts or the car itself because you are the builder. You do NOT pay tax on the engine, frame or body. The local tag office is not even set up to collect the sales/use tax anyway, it has to be filed on the above mentioned form.

4. If you attempt to register a roller (Superformance, Backdraft, etc) you will be asked to show your MSO and your bill of sale for the roller. If you did not pay sales tax on the roller, you WILL pay 6.25% Texas vehicle sales tax on the roller at the time of registration.

HMMMM.. well I was going to file a refund request through the Texas Comptrollers Office to get back the 6.25% motor vehicle sales tax I paid, but then again, they might then turn around and want the Occassional Use Tax instead since most of my kit and parts were purchased from out of state! Nevermind, the state can keep the money I guess...

Joe - -