Motor carrier taxes - Texas

Sales & use taxes

Texas imposes a sales and use tax on all retail sales, leases, and rentals of most goods, as well as taxable services. Local taxing jurisdictions can also impose up to 2 percent sales and use tax for a maximum combined rate of 8.25 percent.

Tractors, trucks, and truck tractors (pulling units) registered with apportioned plates under the International Registration Plan (IRP) are exempt from motor vehicle tax when the vehicles are either purchased within Texas, or are purchased out-of-state and registration fees are apportioned into Texas. Trailers pulled by apportioned tractors and operated interstate also qualify for the exemption. This also includes any bus used in transportation of chartered parties if the bus meets all the standards required of other motor vehicles for apportioned registration fees.

Texas allows credit for sales or use tax on an item paid to another state, including any political subdivision of that state, on a motor vehicle that later become subject to the Texas motor vehicle use tax. The credit allowed is the amount of the prior payment to the other state or political subdivision of that state. If the purchaser is leasing a vehicle and paying the tax to another state along with the lease payments, credit can be allowed only for tax already remitted to the other state prior to operating the vehicle in Texas. Credit is not allowed for a foreign country’s tax, custom or duty tax, or import tax.

The purchaser can show a tax receipt, a seller’s invoice, or contract verifying the amount of tax paid to another state and any political subdivision of that state.