Texas House Bill HB4201

Texas 2009 - 81st Regular

Caption

Relating to a credit or reimbursement of the motor vehicle sales tax paid on uncollectable payments.

Impact

The impact of HB 4201 on state laws primarily revolves around the modification of tax liability relating to motor vehicle sales. By allowing credits or reimbursements for uncollectible payments, the bill seeks to alleviate some of the financial burdens faced by auto dealers who are unable to collect the sales prices of vehicles sold. The proposed change is expected to promote better cash flow for dealerships, particularly during periods of economic hardship where vehicle sales might plummet.

Summary

House Bill 4201 aims to amend the Texas Tax Code by introducing provisions for a credit or reimbursement of the motor vehicle sales tax specifically for uncollectible payments. This bill allows entities within an affiliated group, which includes automobile manufacturers, to receive tax credits for sales tax that has previously been paid by sellers for transactions that ultimately result in non-collectible payments. This update is intended to provide financial relief to dealerships struggling with unpaid sales taxes due to customer defaults.

Contention

Notable points of contention surrounding the bill include concerns from lawmakers about the potential loss of tax revenue for the state. Critics may argue that while this provision helps dealerships, it may ultimately alter the overall tax revenue landscape and lead to budgetary adjustments. Additionally, there are questions regarding the specifics of compliance for entities wanting to claim these credits, particularly how dealerships will document their uncollectible payments against the stringent tax regulations already in place.