- (a) A person is engaging in business when the person regularly and actively engages in selling motor vehicles as a primary function of his business and sells at least five different vehicles acquired for the exclusive purpose of resale and not for use within any given 12-month period, or regularly and actively engages in renting or leasing, as defined by the Tax Code, §152.001, as a primary function of his business, and rents or leases at least five different motor vehicles in any given 12-month period.
- (b) For purposes of computing motor vehicle sales tax a person engaging in the business of selling, renting or leasing motor vehicles may deduct the fair market value of a replaced motor vehicle from the total consideration paid for a replacement motor vehicle.
(c) Determining the fair market value of the replaced motor vehicle.
- (1) The fair market value of a replaced motor vehicle that has been sold prior to the purchase of a replacement motor vehicle shall be the total consideration received from the sale of the replaced motor vehicle.
- (2) The fair market value of the replaced motor vehicle that has not been sold prior to the purchase of the replacement motor vehicle is the book value of the motor vehicle on the title owner's books at the time the motor vehicle is retired from business or personal use, provided the owner's book value is based on accepted accounting principles. If the Comptroller of Public Accounts determines that the owner's book value is not based on accepted accounting principles, the fair market value shall be the total purchase price of the vehicle, less depreciation at the rate of 2.0% per month of the first 36 months from the date of purchase, then at a rate of 1.0% per month for the remainder of the depreciable life of the vehicle.
Source Note:The provisions of this §3.73 adopted to be effective December 6, 1996, 21 TexReg 11488.