Tag Archives: military sales tax exemption

At 1000 on Monday, I’ll be testifying at the Texas Senate Finance committee for a bill to exempt active duty troops from paying additional sales tax on vehicles purchased outside the state before they can be registered in Texas.

According to Texas law, out of state residents moving to Texas or wishing to register their vehicles here must pay additional sales tax on the vehicle if the tax rate in the state where the vehicle was purchased is lower than the Texas state rate of 6.25%. The tax is based on the sale price of the vehicle or the standard presumptive value. So, if you purchased the vehicle for $20,000 in Montana where there is no sales tax, you would be required to pay $1200 in sales taxes before you could register your vehicle in Texas – on top of registration fees.

This greatly impacts Soldiers, so during a campaign stop by Governor Rick Perry last year, I put him on the spot and asked him if he would sign legislation to exempt Soldiers from this burdensome tax. He looked over at my State Representative Ralph Sheffield and told him, “Ralph, put it on my desk and I’ll sign it.”

After that encounter, I contact both Mr. Sheffield and my State Senator Troy Fraser about the issue. They immediately went to work drafting legislation that would exempt active duty troops from paying sales tax on vehicles purchased outside the state while on military orders. Here is the text of SB522:

A BILL TO BE ENTITLED
AN ACT

relating to an exemption from the motor vehicle use tax for motor
vehicles brought into this state by military service members
serving on active duty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTIONA1.AASection 152.022, Tax Code, is amended by adding
Subsection (c) to read as follows:
(c)AAThe tax imposed by this section does not apply to a motor
vehicle purchased at retail sale outside this state and used on the
public highways of this state by an active duty member of the United
States armed forces residing in this state on military orders.

SECTIONA2.AASection 152.023, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d)AAThe tax imposed by this section does not apply to a motor
vehicle described by Subsection (a) that is brought into this state
by an active duty member of the United States armed forces residing
in this state on military orders.

SECTIONA3.AAThe change in law made by this Act does not
affect taxes imposed before the effective date of this Act, and the
law in effect immediately before that date is continued in effect
for purposes of the liability for and collection of those taxes.

SECTIONA4.AAThis Act takes effect July 1, 2011, if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for effect on that
date, this Act takes effect September 1, 2011.