Staying Abreast of Late Tax Payment Penalties as a Texas Auto Dealership
Are you having trouble keeping up with your motor vehicle taxes? Many dealerships do based on stringent requirements associated with tax payments.
For instance, barring an exception to the policy, the motor vehicle tax must be paid by the 30th day after the delivery has been made. This applies to when you take possession of a vehicle or the operator buys a vehicle for Texas highway use.
It is a requirement for dealers licensed by the Texas Department of Motor Vehicles to collect sales tax on taxable sales. There are exceptions in cases where the vehicle is a non-titled trailer or the vehicle weighs more than 11,000 pounds.
Any dealer licensed by the Texas DMV must turn in this tax to the CTAC (county tax assessor-collector) within 30 days. Dealers remit any taxes on seller-financing sales to the Comptroller’s office.
On the other hand, if the seller isn’t licensed by the DMV, the person purchasing the vehicle must register and title the vehicle and pay any tax to the CTAC.
Are Things Different for Active Duty Military Members?
Any member of the military who is on active duty, including reserve units and the National Guard, has 60 days from the purchase or first use in the state to transfer the title and pay the registration fees when buying a used vehicle from a private party.
This due date is different from that of other people who buy a vehicle, where 30 days of purchase is the deadline. If standard presumptive value (SPV) procedures apply to active duty members of the military, a certified appraisal can be used as documentation.
Penalties for Dealerships, Operators, and Purchasers
If the licensed dealer, operator, or purchaser doesn’t send in the vehicle tax amount by the 30th day (or the 60th in cases where this is applicable), a 5% penalty will be levied. If another 30 days pass, another 5% will be levied for a total of 10%.
All penalties are based on the amount of tax due on any vehicle for the responsible person who didn’t pay the tax. This even includes untitled and unregistered vehicles. The minimum penalty is $1. Even if the delay was beyond the control of the party, the penalty remains.
Exceptions to the Tax Penalty
There are a few situations where penalties are not imposed. These include trade transfer tax, gift tax, new resident tax, or exempt transfer situations.
Team Up with The Title Girl to Ensure All Taxes Are Paid on Time
If you are experiencing issues tracking late fees, those charges can easily add up. But there is an easier and better way to handle things. There’s no need to bring in new team members and deal with the expenses of training. Instead, let experts who already know the process take care of things for you.
At The Title Girl, we have revolutionized a titling model for Texas dealerships, where even small nuances in paperwork can cause problems. Our proprietary software is built to handle all aspects of the titling process in the state. But that’s not all we can provide.
Enjoy accounting reconciliation in half the typical time.
Be aware of where all titles are at any time.
Know whether you’re compliant with overcharges.
Understand what to prioritize based on late fees and escalations.
And so much more!
Let The Title Girl Help Today
Whether you need someone permanent to help out or staff for temporary help, The Title Girl can provide it. We’ll make sure you never have to deal with late fee penalties so you can focus energy on the rest of your business. Get in contact with us today to learn more.