Dealer’s Motor Vehicle Inventory Tax Declaration Instructions and Information
A motor vehicle is a fully self-propelled vehicle with at least two wheels which has the primary purpose of transporting people or property (whether
or not intended for use on a public street, road or highway) and includes a towable recreational vehicle. Motor vehicle does not include: 1. Vehicles
with a certificate of title that has been surrendered in exchange for a salvage certificate; nor 2. equipment or machinery designed and intended for
a specific work-related purpose other than transporting people or property. Motor vehicle inventory does not include fleet transactions, dealer sales
or subsequent sales.
GENERAL INSTRUCTIONS: This declaration is for a dealer of motor vehicles to declare motor vehicle inventory pursuant to Tax Code Section
23.121. File a declaration for each business location.
ALTERNATIVE ELECTION: Effective Jan. 1, 2014, certain dealers of motor vehicle inventory may elect to file renditions under Tax Code Chapter
22, rather than file declarations and tax statements under Tax Code Chapter 23. Tax Code Section 23.121(a)(3) allows a dealer to make this
election if it (1) does not sell motor vehicles that are self-propelled and designed to transport persons or property on public highway; (2) meets
either of the following two requirements: (a) the total annual sales from the inventory, less sales to dealers, fleet transactions, and subsequent
sales, for the preceding tax year are 25% or less of the dealer’s total revenue from all sources during that period, or (b) the dealer did not sell a
motor vehicle to a person other than another dealer during the preceding tax year and the dealer estimates that the dealer’s total annual sales
from the dealer’s motor vehicle inventory, less sales to dealers, fleet transactions, and subsequent sales, for the 12-month period corresponding to
the current tax year will be 25% or less of the dealer’s total revenue from all sources during that period; (3) files with the chief appraiser and the
tax collector by Aug. 31 of the tax year preceding Jan. 1 on a form prescribed by the Comptroller a declaration that the dealer elects not to be
treated as a dealer under Tax Code Section 23.121 in the current tax year; AND (4) renders the dealer’s motor vehicle inventory in the current tax
year by filing a rendition with the chief appraiser in the manner provided by Tax Code Chapter 22. A dealer who makes this election must file the
election annually with the chief appraiser and the tax collector by Aug. 31 of the preceding tax year, so long as the dealer meets the eligibility
requirements of law.
WHERE TO FILE: Each declaration must be filed with the county appraisal district’s chief appraiser and a copy of each declaration must be filed
with the collector.
DECLARATION DEADLINES: Except as provided by Tax Code Section 23.122(l), a declaration must be filed not later than Feb. 1 each year
or, in the case of a dealer who was not in business on Jan. 1, not later than 30 days after commencement of the business. A dealer is presumed
to have commenced business on the date of issuance of a dealer’s general distinguishing number as provided by Transportation Code Chapter
503. Notwithstanding this presumption, a chief appraiser may, at his or her sole discretion, designate another date on which a dealer commenced
business.
PENALTIES: A dealer who fails to file a declaration commits a misdemeanor offense punishable by a fine not to exceed $500. Each day during
which a dealer fails to comply is a separate violation. In addition to other penalties provided by law, a dealer who fails to file or timely file a required
declaration must forfeit a penalty of $1,000 for each month or part of a month in which a declaration is not filed or timely filed after it is due. A tax
lien attaches to the dealer’s business personal property to secure payment of the penalty.
OTHER IMPORTANT INFORMATION: The chief appraiser may examine the books and records of a dealer as provided by Tax Code Section
23.121(g).
ADDITIONAL INSTRUCTIONS
Step 1. Dealer Information.
Step 2. All Business Locations and General Distinguishing Numbers. Attach a list with the name and business address of each location
which you conduct business and each of the dealer’s general distinguishing numbers issued by the Texas Department of Motor Vehicles.
Step 3. Business Location Information. Provide the business name, general distinguishing number, physical address of the business location
and account number for the inventory being declared or you may attach a tax bill or a copy of appraisal or tax office correspondence concerning
your account.
Step 4. Number of units sold and sale totals. The top row of boxes is the number of units sold for the preceding year in each category. The
bottom row of boxes is the dollar amount sold for the previous year in each category. The categories include:
• Motor vehicle inventory – sales of motor vehicles.
• Fleet transaction – motor vehicles included in the sale of five or more motor vehicles from your inventory to the same person within one
calendar year.
• Dealer sales – sales of vehicles to another Texas dealer or a dealer who is legally recognized in another state as a motor vehicle dealer.
• Subsequent sales – dealer-financed sale of a motor vehicle that, at the time of sale, has been the subject of dealer financing from your motor
vehicle inventory in the same calendar year.
Step 5. Market Value of Motor Vehicle Inventory. State the market value of the motor vehicle inventory for the current tax year, as computed
under Tax Code Section 23.121. Market value is total annual sales less sales to dealers, fleet transactions, and subsequent sales, from the
dealer’s motor vehicle inventory for the previous 12-month period corresponding to the prior tax year divided by 12. Total annual sales is the total
of the sales price from every sale from a dealer’s motor vehicle inventory for a 12-month period. If you were not in business for the entire
12-month period, report the total number of sales for the months you were in business. The chief appraiser will determine the inventory’s market
value.
Step 6. Signature and Date. By signing this declaration, you certify that the dealer identified in Step 1 is the owner of a dealer’s motor vehicle
inventory.
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