Does a Salvage Vehicle Need to Appear in the VIT?
Recently, a dealer reached out to TIADA through the Compliance Consultation Service to ask if a salvage vehicle needs to be reported on a dealer's vehicle inventory tax declaration. This blog post answers that question.
Dealer Question: Does a salvage vehicle need to appear in the VIT?
Answer: No. A salvage vehicle does not need to be reported on a dealer's vehicle inventory tax declaration. The Texas Tax Code definition of “motor vehicle” says “The term does not include: (A) a vehicle with respect to which the certificate of title has been surrendered in exchange for a salvage certificate in the manner provided by law;…” Texas Tax Code Section 23.121(8)(A).
Few dealer compliance issues in Texas raise more questions than how to handle collecting and paying vehicle inventory tax. VIT is a method of placing a value on a dealer's inventory for the purpose of calculating the amount of property tax (also referred to as ad valorem tax) owed.
Dealers who make retail sales are required to comply with the state's special motor vehicle inventory appraisal procedures. By February 1 of each year, dealers are required to file a “Dealer's Motor Vehicle Inventory Declaration” with the county's chief appraiser and file a copy with the county tax collector. The declaration form is issued by the state comptroller and should be available from the comptroller's property tax division or the county appraiser's office. Additionally, dealers must file monthly reports “Dealer's Motor Vehicle Inventory Tax Statement”, with the county tax collector by the tenth of each month listing all sales for the prior month. Property taxes based on the amount of retail sales prices must be paid with the statement. These reports must be filed even if no sales occurred in the month.
Information about dealer inventory tax can be obtained from the State Comptroller's property tax division. Copies of the declaration form can be obtained from the county tax collector or the county appraisal district. The Comptroller also offers a helpful booklet on this topic available on their website.