Experienced Lawyers for Controversies Involving Texas Motor Vehicle Taxes and Fuel Taxes
Texas relies heavily on revenue from motor vehicle sales and fuel sales—more so than most other states. As a result, enforcing compliance with these tax obligations is among the Texas Comptroller’s top priorities. Nonpayment and underpayment of Texas motor vehicle taxes and fuel taxes can expose businesses and individuals to substantial penalties, including criminal penalties in some cases.
Our lawyers provide experienced representation for all Texas motor vehicle tax and fuel tax matters. This includes motor vehicle tax and fuel tax audits, tax assessment disputes and litigation, and criminal investigations and prosecutions. We focus our practice on representing corporate clients and high-asset individuals, and we have decades of experience securing favorable outcomes for our clients.
Texas Motor Vehicle Tax Controversies
Motor vehicle sales are subject to sales tax under Texas law. While there are exceptions, they apply primarily to transactions between parties in the supply chain (i.e., manufacturers and dealers). As a general rule, purchasers are required to pay sales tax at the time of sale, and sellers are required to collect and remit sales tax in compliance with state and local law. But certain exceptions apply here as well (e.g., sales of vehicles with a GVWR of 11,000 or more), and all buyers and sellers must ensure they have a clear understanding of their tax-related obligations.
We represent manufacturers, dealers, collectors, and other clients in Texas motor vehicle tax controversies, including Texas sales tax audits involving motor vehicle taxes. If you are facing scrutiny from the Texas Comptroller regarding motor vehicle sales tax compliance, or if you have concerns about potential scrutiny related to the nonpayment or underpayment of motor vehicle sales tax, we invite you to contact us for more information.
Texas Fuel Tax Controversies
We also represent a wide range of clients in Texas fuel tax controversies. We also handle matters involving fuel tax fees. This includes (but is not limited to) matters related to:
- Compressed natural gas (CNG) and liquefied natural gas (LNG) taxes
- Diesel fuel taxes
- Gasoline taxes
- International Fuel Tax Agreement (IFTA) and trip permit issues
- Motor fuel transporter taxes and fees
Strict and complicated rules apply to the calculation of fuel taxes and fees, and when companies get these calculations wrong, they can face substantial liability. However, the Texas Comptroller can (and does) miscalculate companies’ fuel tax liability as well, and, in these cases, it is up to companies and their tax counsel to ensure that they are not paying more than necessary.
Our lawyers handle fuel tax audits and other fuel tax controversies involving the Texas Comptroller. We also represent clients in fuel tax-related litigation when necessary. Here too, if you have questions or concerns, we invite you to contact us to discuss how we can help.
Criminal Cases Involving Texas Motor Vehicle and Fuel Taxes
While most Texas motor vehicle and fuel tax controversies are civil in nature, state prosecutors can (and do) pursue criminal charges when warranted. The Texas Tax Code imposes substantial penalties for high-value tax crimes, and many of these crimes can be prosecuted as felonies. Some examples of potential felony charges related to the underpayment and nonpayment of Texas motor vehicle and fuel taxes include:
- Failing to remit collected motor vehicle or fuel taxes
- Making unauthorized purchases or sales of dyed diesel fuel
- Making unauthorized purchases or sales of tax-free fuel
- Importing motor vehicles or fuel without paying the tax due
- Falsifying records with the intent to evade or defeat tax
Again, these are just examples. If you or your company is under investigation or facing an indictment, it is critical to ensure that you have a comprehensive understanding of the allegations at issue. Our lawyers can help, but it is important that you engage our firm as soon as possible.
FAQs: Texas Motor Vehicle Taxes
What should I do if I receive an audit notice from the Texas Comptroller?
If you received an audit notice from the Texas Comptroller related to your (or your company’s) motor vehicle or fuel tax liability, you should engage experienced tax counsel promptly. The Texas Comptroller prioritizes motor vehicle and fuel tax enforcement, and accusations of failing to pay or underpaying these taxes can potentially lead to both civil liability and criminal charges.
What should I do if I receive a Notification of Audit Results (NAR)?
If you received a Notice of Audit Results (NAR) related to a motor vehicle or fuel tax audit in Texas, you should carefully review the NAR. You should also have the NAR reviewed promptly by experienced tax counsel. Motor vehicle and fuel tax audits can (and do) result in unwarranted assessments, and you will need to make an informed and timely decision about whether to challenge the Texas Comptroller’s findings.
What is the standard sales tax rate for motor vehicles in Texas?
Texas’s standard sales tax rate for motor vehicles is the same as it is for most other products—6.25 percent of the sales price. However, exceptions apply, and businesses may be eligible to avoid collecting and remitting motor vehicle sales tax in various circumstances.
What are the penalties for failing to collect or remit Texas motor vehicle sales tax or fuel tax?
The penalties for failing to collect or remit Texas motor vehicle sales or fuel tax depend on the circumstances. As noted above, while most motor vehicle and fuel tax enforcement proceedings are civil in nature, prosecutors can pursue criminal charges in some cases. While civil penalties are monetary in nature, criminal penalties can include both fines and prison time.
Request a Confidential Consultation with a Texas Tax Attorney at Brown PC
If you need more information about Texas’s motor vehicle and fuel tax laws or the risks of facing an audit or investigation, we encourage you to contact us promptly. Call 888-870-0025 or contact us online to request a confidential consultation with a Texas tax attorney at Brown PC.