For property tax purposes, Texas law requires that a motor vehicle dealer's inventory is appraised based on the total sales of motor vehicles in the prior year.
The Senate Bill 878, effective January 1, 1994, was enacted by the 73rd Texas Legislature changing how a county appraisal district appraises motor vehicle inventory for property tax purposes and how dealers pay their property taxes on this inventory. This is called Vehilce Inventory Tax, VIT.
Dealers must file with the county appraisal district a "Dealer's Motor Vehicle Inventory Declaration form" listing the total value of the inventory sold in the prior year. Also, the dealer must file with the county tax office a monthly form - "Dealer's Motor Vehicle Inventory Tax Statement" - listing the motor vehicles sold, and prepay their property taxes for each vehicle.
Texas law permits the Comptroller's office to act only as an advisory agency with regard to property taxes. The Comptroller helps property owners and tax officials interpret the property tax laws. Texas law also requires the Comptroller to adopt forms for filing the motor vehicle dealer's inventory.