Blog

How Long Must I Keep My Records? A Record Retention Refresher

Selling cars inevitably creates a great deal of paperwork, and dealers often call to ask TIADA how long they must keep and store these documents. Various state agencies have different record retention requirements. In this blog post, we detail those requirements so dealers can purge their files of unnecessary paperwork and clutter.  It does not include a list of specific records required to be kept by the agencies. The Texas Administrative Code includes all requirements in the code sections and statutes cited below. As always, members may contact the TIADA state office with any questions. We have also provided a specific contact person at each agency with a phone number and email address.

Office of Consumer Credit Commissioner (OCCC):
 
Summary: Four years from contract date, 3 years from last payment received, or two years from the final entry made, whichever is later.
 
Rules can be found in the Texas Administrative Code, Title 7, Part 5, Chapter 84, Subchapter G, Sec 84.707-709. 
 
Retention and availability of records: All books and records required by this subsection must be available for inspection at any time by Office of Consumer Credit Commissioner staff, and must be retained for a period of three years from the date of the last payment made on the retail installment sales transaction, four years from the date of the contract, two years from the date of the final entry made thereon, whichever is later, or a different period of time if required by federal law. Upon notification of an examination pursuant to Texas Finance Code, §348.514(f), the licensee must be able to produce or access required books and records within a reasonable time at the licensed location or registered office specified on the license.

The records required by this subsection must be available or accessible at an office in the state designated by the licensee except when the retail installment sales transactions are transferred under an agreement which gives the commissioner access to the documents. Documents may be maintained out of state if the licensee has in writing acknowledged responsibility for either making the records available within the state for examination or by acknowledging responsibility for additional examination costs associated with examinations conducted out of state.
 
Agency contact for dealer questions:
Rudy Aguilar
512.936.7627
rudy.aguilar@occc.state.tx.us
 
TxDMV Enforcement Division:
 
Summary: 48 months.

Rules can be found in the Texas Administrative Code, Title 43, Part 10, Chapter 215, Subchapter E, Rule 215.144. 
 
Purchase and sales records: A dealer must keep a complete record of all vehicle purchases and sales for a minimum period of 48 months and make those records available for inspection and copying by a representative of the department during business hours.
 
Records reflecting purchases and sales for at least the preceding 13 months must be maintained at the dealer's location. Records for prior time periods may be kept off-site at a location within the same county.
 
Agency contact for dealer questions:
Corrie Thompson
512.465.4204
corrie.thompson@txdmv.gov
 
Texas Comptroller of Public Accounts:
 
Summary: Four years from last payment received, or four years from date of sale.
 
Rules can be found in the Tax Code, Chapter 152, Sec. 152.063 and 152.0635. RECORDS OF CERTAIN SELLERS.  (a)  In addition to the requirements prescribed by Section 152.063, a seller engaged in seller-financed sales who has a permit under Section 152.065 shall keep the records required by this section.
 
(b)  For seller-financed sales, the seller shall keep at the seller's principal office for at least four years from the date on which the seller receives the final payment for the motor vehicle:
(1)  the lien holder's copy of the receipt for title application, registration, and motor vehicle tax issued by a county tax assessor-collector; and
(2)  a ledger or other document containing a complete record of the payment history for that motor vehicle, including:
(A)  the name and address of the purchaser;
(B)  the total consideration;
(C)  the amount of the down payment received at the time the motor vehicle is sold;
(D)  the date and amount of each subsequent payment;
(E)  the date of sale; and
(F)  the date of any repossession.
(c)  For retail sales paid in full at the time of sale, the seller shall keep at the seller's principal office for at least four years from the date of the sale documentation of complete payment in the form of:
(1)  a copy of the payment instrument or a receipt for cash received; and
(2)  a copy of the receipt for title application, registration, and motor vehicle tax issued by the county tax assessor-collector.
(d)  For sales for resale, the seller shall keep at the seller's principal office for at least four years from the date of the sale the purchaser's written statement of resale on a form prescribed by the comptroller.
 
Agency contact for dealer questions:
Curt Swenson
512.463.4434
curt.swenson@cpa.state.tx.us
 
Internal Revenue Service (IRS):
 
Summary: (various)
 
IRS requirements are substantially more complex and require records to be retained for different time periods. You should contact your dealership's CPA to determine what records need to be kept and for what duration.

NOTE: the Texas Tax Code (referenced in the Comptroller's information above) requires that some documents be kept for four years rather than the three years required by the IRS.
 
Contact your dealership's CPA with any questions. If you do not currently have a CPA, contact the TIADA state office.

Comments

There have been no comments made on this article. Why not be the first and add your own comment using the form below.

Leave a comment

Commenting is restricted to members only. Please login now to submit a comment.