TX
Texas House Bill HB5250

Texas 2025 - 89th Regular

Texas House Bill HB5250

Voted on by House
 
Out of Senate Committee
 
Voted on by Senate
 
Governor Action
 
Bill Becomes Law
 

Caption

Relating to a refund of motor vehicle sales taxes paid on certain bad debt.

Impact

The implementation of HB 5250 is expected to provide a beneficial impact on automotive retailers by facilitating refunds for sales taxes that they previously paid but could not recover due to customers defaulting on their retail installment transactions. This change will likely improve cash flow for sellers who often face the financial burden of unpaid debts, thus allowing them to reinvest in their business or offer more flexible financing options to consumers. However, this act will not apply to seller-financed sales, limiting its scope to transactions involving lenders licensed under relevant financial codes.

Summary

House Bill 5250 aims to amend the Texas Tax Code by introducing provisions that allow sellers to claim a refund for motor vehicle sales taxes paid on accounts deemed as bad debt. Specifically, the bill defines 'bad debt' as the unpaid balance of a retail installment transaction charged off for federal income tax purposes. This legislative change is significant as it provides financial relief to sellers when a customer defaults on payments, thus acknowledging the realities of the credit marketplace in the auto sales industry.

Contention

Despite its potential benefits, HB 5250 may face scrutiny regarding its implications for state tax revenue. Opponents of the bill could argue that allowing such refunds diminishes the overall tax income from motor vehicle sales, affecting state-funded services reliant on this revenue. Moreover, there may be concerns about the administrative complexities involved in processing these refunds, especially in the need for sellers to provide adequate documentation that proves the account is worthless and meets the stipulated criteria. Overall, the contention revolves around balancing the need for financial relief to businesses and maintaining state revenue streams.

Texas Constitutional Statutes Affected

Tax Code

  • Chapter 152. Taxes On Sale, Rental, And Use Of Motor Vehicles
    • Section: New Section

Finance Code

  • Chapter 341. General Provisions
    • Section: New Section
  • Chapter 348. Motor Vehicle Installment Sales
    • Section: New Section

Companion Bills

No companion bills found.

Previously Filed As

TX HB3389

Relating to a refund of motor vehicle sales taxes paid on certain bad debt.

TX HB3599

Relating to an exemption from certain motor fuel taxes for, and registration fees for motor vehicles owned by, certain nonprofit food banks.

TX HB1933

Relating to the process for rescinding or canceling a dealer's sale of a used motor vehicle.

TX HB2226

Relating to state and municipal motor fuel taxes; providing civil penalties; creating criminal offenses; requiring occupational licenses; authorizing the imposition of taxes; providing for increases and decreases in the rates of taxes.

TX HB4602

Relating to the collection, remittance, and administration of certain taxes on motor vehicles rented through a marketplace rental provider; imposing a penalty.

TX HB3209

Relating to the collection, remittance, and administration of certain taxes on motor vehicles rented through a marketplace rental provider; imposing a penalty.

TX HB5223

Relating to the amount of certain motor vehicle sales and use taxes and penalties that certain counties may retain each year.

TX SB1521

Relating to the amount of certain motor vehicle sales and use taxes and penalties that certain counties may retain each year.

TX HB38

Relating to the elimination of certain property taxes for school district maintenance and operations and the provision of public education funding by increasing the rates of certain state taxes.

TX HB4094

Relating to a refund of sales and use taxes paid on the purchase of certain aircraft leased for flight instruction.

Similar Bills

No similar bills found.