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Dealers Benefit from the Comptroller's Deferred Sales Tax Exception

Dealerships were facing the acceleration of deferred sales tax despite the COVID-19 pandemic. Initially, the Texas Comptroller's strict 60-day registration rule caused confusion, leaving many dealers financially strained. Amidst the chaos, a glimmer of hope emerged for those who had paid their deferred sales tax on time but faced delays in registrations between March 1, 2020, and December 31, 2021.

Initially, the Comptroller took the position that because they were open, the vehicles still needed to be registered within 60 days, or deferred sales tax would be accelerated. Several dealers reached out to TIADA as they failed to pay their deferred sales tax on time and failed to register vehicles timely. TIADA was then and is still unable to help those dealers as the Comptroller's position remains that the dealer was able to pay the tax. However, a few dealers reached out that paid their deferred sales tax on time and did not register timely. Initially, these dealers had their tax accelerated as well. However, the Comptroller, after speaking with numerous stakeholders, including TIADA and TIADA members, about the difficulties dealers faced in registering vehicles during COVID, has reversed their position on accelerating taxes for dealers that paid their deferred sales tax on time but failed to register vehicles with dates from March 1, 2020, to December 31, 2021, based on the transfer date. Please note if you failed to pay the deferred sales tax when it was due, you do not qualify for this exception.

Following consultations with stakeholders, the Comptroller reversed their position, offering these dealers an exception. Particularly for those taking advantage of deferred sales tax, recent decisions by the Comptroller have significant implications for prior audits. The challenges posed by the pandemic, such as the inability to transfer vehicles timely due to restrictions at local tax offices, further complicated matters for numerous dealers. Understanding the intricacies of the Comptroller's exception is essential.

If you take advantage of deferred sales tax, the Comptroller has made a decision that might impact a prior audit. During COVID, several dealers failed to timely transfer vehicles due to the inability to do so at their local tax office or difficulty in doing so.
 
After changing their position, the Comptroller has compiled a list of impacted dealers. So please keep in mind that the Comptroller knows who falls under this new exception and will be contacting you, so there is no need to hire someone to obtain the refund that is already coming your way.

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