Texas Comptroller of Public Accounts    STAR System


201007870H



SOAH DOCKET NO. 304-10-0944.14
CPA HEARING NO. 102,439

RE: **************
TAXPAYER NO.: **************
AUDIT OFFICE: Refund Claims/Overpayments Verification **************
AUDIT PERIOD: April 4, 2008 THROUGH April 4, 2008

Motor Vehicle Sales And Use Tax - TAC/RFD

BEFORE THE COMPTROLLER 
OF PUBLIC ACCOUNTS 
OF THE STATE OF TEXAS

SUSAN COMBS
Texas Comptroller of Public Accounts

DEANNE Z. CUMMINGS-SCOTT
Representing Tax Division

**************
Representing Claimant


COMPTROLLER’S DECISION

************** (Claimant) appealed the denial of his refund claim by the Texas 
Comptroller of Public Accounts (Comptroller).  Claimant contends that he is 
entitled to a refund of the motor vehicle sales tax that he paid because the 
vehicle was exported to another country.  Comptroller Staff (Staff) contends 
that the refund should be denied because Claimant has not demonstrated that the 
vehicle was not used in Texas before it was shipped outside of Texas.  In his 
Proposal for Decision, the Administrative Law Judge (ALJ) recommends that the 
refund denial be affirmed.

I.  PROCEDURAL HISTORY, NOTICE & JURISDICTION

Staff referred the case to the State Office of Administrative Hearings (SOAH) 
on October 23, 2009, for a hearing on written submissions.  There are no issues 
of notice or jurisdiction in this proceeding.  Therefore, these matters are set 
out in the Findings of Fact and Conclusions of Law without further discussion 
here.

Claimant represented himself, and Staff was represented by Assistant General 
Counsel DeAnne Cummings-Scott.  The record closed on June 16, 2010.

II. REASONS FOR DECISION

A. Background Facts and Issues Presented

Claimant purchased a 2008 BMW X5 (the vehicle) on April 4, 2008, from a dealer, 
DEALERSHIP.  The dealer collected $************** for motor vehicle tax that 
was remitted to the ************** County Tax Assessor/Collector.  A Texas 
Certificate of Title for the vehicle was issued to Claimant on April 30, 2008.  
The vehicle was registered in Claimant’s name on April 16, 2008.  The vehicle 
registered an odometer reading of 14 miles on the Bill of Sale dated April 4, 
2008, and on the Texas Certificate of Title dated April 30, 2008.  Claimant 
shipped the vehicle from the LOCATION A to LOCATION B, Ghana, via AIRLINE 
COMPANY.  The Bill of Lading is dated May 27, 2008, but Claimant states that 
the LOCATION A took possession of the vehicle on May 15, 2008, and that it was 
shipped out of the LOCATION A on May 16, 2008.  There was no odometer reading 
recorded on Bill of Lading. 

Claimant filed a claim for a refund dated August 7, 2008, for the motor vehicle 
sales and use tax paid on the purchase of the vehicle.  The Comptroller denied 
the refund claim on August 25, 2008, and the stated basis for the denial was 
“[t]ax paid not eligible for refund.”  Claimant requested a refund hearing.

Parties’ Arguments

Claimant contends that it is entitled to the refund because the vehicle was 
exported abroad after its purchase.  Claimant further argues that the vehicle 
was not used or driven in the United States.  Claimant, who initially claimed 
the vehicle was turned over to the LOCATION A on May 15, 2008, now claims that 
it was turned over to the common carrier representative on May 9, 2008.  He 
further claims that the Bill of Lading was prepared after the ship had set sail 
and the date it bears is not indicative of its actual shipping date.  Claimant 
further contends that the vehicle was placed in a shipping container after its 
purchase, where it sat while the unused space was occupied by other personal 
items intended for shipment to Ghana.  Claimant further asserts the rules for 
exporting vehicles out of the country required that he register the vehicle in 
his name. 

Staff initially argued that Claimant’s refund claim should be denied because he 
lacked standing to file the claim.  Staff insisted that Claimant had to secure 
an assignment from the motor vehicle dealer before his refund claim could be 
accepted.  Staff, however, in its pleading filed with SOAH on May 17, 2010, 
withdrew this argument.  Staff pointed to the proposed rule change published in 
the April 2, 2010, issue of the Texas Register that amends 34 TEX. ADMIN. CODE 
Section 3.75 to provide that the county tax assessor-collector who remits the 
motor vehicle sales tax authorizes the Comptroller to accept refund requests 
directly from the purchaser.  Staff, however, contends that the claim should be 
denied but on other grounds.  Staff contends that Claimant has provided no 
evidence showing that the vehicle was not used in Texas.  Staff argues that the 
evidence offered by Claimant does not explain the “vehicle’s whereabouts in the 
weeks preceding its delivery to the shipper.”  There also is no record of the 
vehicle’s mileage on the date the vehicle was delivered for shipping abroad.

B. Evidence Presented

Staff submitted the administrative record consisting of the pleadings filed by 
the parties while the case was pending before the Comptroller.  Staff also 
submitted a copy of the refund denial letter.  Attached to Claimant’s statement 
of grounds and reply to the position letter were copies of the refund claim, 
the Bill of Sale, the Bill of Lading, the certificate of title, an Import of 
Second-Hand Vehicle – Assessment of Value prepared by the Ghana Customs Excise 
& Preventive Service, and Texas title application/registration of motor vehicle 
tax receipts.  Claimant provided directly to SOAH a copy of the Vehicle 
Information Sheet/Letter of Intent to Export.

C. Authorities and ALJ’s Analysis

A motor vehicle sales tax at the rate of 6.25 percent is imposed on each retail 
sale of a motor vehicle. [ENDNOTE: (1)] A “retail sale” means the sale of a 
motor vehicle except certain sales to dealers. [ENDNOTE: (2)]  Claimant is not 
a dealer; therefore, the sale to Claimant was a retail sale that is subject to 
tax, unless Claimant can establish an exemption applies.

Motor vehicle sales tax is not due on the retail sale of a vehicle if the 
vehicle is “transported out of state, prior to any use in this state other than 
the transportation of the vehicle out of state, for use exclusively outside 
this state.” [ENDNOTE: (3)]  The exemption must be claimed at the time of the 
purchase. [ENDNOTE: (4)] The Tax Code contemplates that the purchaser knows at 
the time that the vehicle is intended for use exclusively outside of Texas and 
that the only permissible use in Texas after the purchase is the operation of 
the vehicle to get it outside of Texas. [ENDNOTE: (5)]

The exemption provided for vehicles purchased for transport out of the state is 
strictly construed.  In COMPTROLLER’S DECISION NO. 100,189 (2008), the Claimant 
parked the vehicle until it was shipped.  The vehicle was parked for at least a 
month and a half following its purchase.  The Comptroller held that, “parking 
is still a use in Texas that goes beyond the permissible use of driving the 
vehicle out of state.”

The evidence of record establishes that Claimant registered the vehicle in 
Texas.  Under 34 TEX. ADMIN. CODE Section 3.90(a)(3) the registration of a 
motor vehicle in Texas will create the presumption that the vehicle is for use 
within Texas.  The vehicle in question was in Texas for more than 30 days 
following its registration, until it was shipped out of the country, either on 
May 16, 2008, or May 27, 2008.  Claimant has raised plausible explanations that 
would establish that the vehicle was not used in Texas, but rather was prepared 
for shipping after its purchase.  Claimant, however, has provided no 
third-party evidence to support his assertions.  Claimant’s bare assertions are 
not sufficient to rebut the presumption that the vehicle was used in Texas.  
Consequently, Claimant has failed to prove that the purchase qualified for the 
exemption.

C. Recommendation

The ALJ recommends that the refund claim be denied.

III. FINDINGS OF FACT

1. Claimant purchased a 2008 BMW X5 (vehicle) on April 4, 2008, from 
DEALERSHIP.  The dealer collected $************** for motor vehicle tax that 
was remitted to the ************** County Tax Assessor/Collector.  

2. Claimant filed a claim for a refund dated August 7, 2008, for the motor 
vehicle sales and use tax paid on the purchase of the vehicle.  

3. The Comptroller denied the refund claim on August 25, 2008, and the stated 
basis for the denial was “[t]ax paid not eligible for refund.”  

4. Claimant requested a refund hearing.

5. On October 23, 2009, Comptroller Staff referred the case to the State Office 
of Administrative Hearings for a hearing on written submission.  A notice of 
filing was issued to Claimant.  

6. The notice of filing contained a statement of the nature of the hearing; a 
statement of the legal authority and jurisdiction under which the hearing was 
to be held; a reference to the particular sections of the statutes and rules 
involved; and a short, plain statement of the matters asserted.

7. The record closed on June 16, 2010.

8. The vehicle purchased by Claimant was kept in Texas for at least 30 days 
before it was shipped out of the country.

9. Claimant did not provide evidence that the vehicle was not used in Texas 
before it was shipped out of the country. 

IV. CONCLUSIONS OF LAW

1. The Comptroller has jurisdiction over this matter pursuant to TEX. TAX CODE 
ANN. ch. 111.

2. The State Office of Administrative Hearings has jurisdiction over matters 
related to this proceeding, including the authority to issue a proposal for 
decision, pursuant to TEX. GOV’T CODE ANN. ch. 2003.

3. The Comptroller provided proper and timely notice of the hearing pursuant to 
TEX. GOV’T CODE ANN. ch. 2001.

4. Motor vehicle sales and use tax is not due on a retail sale of a motor 
vehicle that is transported out of state, prior to any use in this state other 
than the transportation of the vehicle out of state, for use exclusively 
outside this state.  TEX. TAX CODE ANN. Section 152.092(a).

5. Registration of a motor vehicle in Texas will create the presumption that 
the vehicle is for use within Texas.  34 TEX. ADMIN. CODE Section 3.90(a)(3).

6. Based on the foregoing Findings of Fact and Conclusions of Law, Claimant has 
not rebutted the presumption that the vehicle was used in Texas.

7. Based on Conclusion of Law No. 6, Claimant is not entitled to an exemption 
from the motor vehicle sales tax and Staff’s denial of the refund claim should 
be affirmed. 


Hearing No. 102,439

ORDER OF THE COMPTROLLER

On June 17, 2010, the State Office of Administrative Hearings’ (SOAH) 
Administrative Law Judge, Peter Brooks, issued a Proposal for Decision in the 
above-referenced matter.  The parties were given fifteen days from the date of 
the Decision to file exceptions with SOAH.  No exceptions were filed, and the 
Comptroller has determined that the Administrative Law Judge’s Proposal for 
Decision should be adopted with two technical corrections.  Accordingly, the 
Decision has been modified in accordance with the Texas Government Code Section 
2003.101(e)(3) as follows:

* Finding of Fact No. 2, page 5 of the Proposal for Decision has been deleted 
as it was included in error.  The remaining Findings of Facts have been 
renumbered accordingly.

* In Conclusion of Law No. 3, page 6, the reference to Chapter 2003 has been 
replaced by the correct statutory reference for notice, Chapter 2001.

The above Decision is approved and adopted in all respects.  This Decision 
becomes final twenty days after the date Claimant receives notice of this 
Decision.  If either party desires a rehearing, that party must file a motion 
for rehearing, which must state the grounds for rehearing, no later than twenty 
days after the date Claimant receives notice of this Decision.  Notice of this 
Decision is presumed to occur on the third day after the date of this Decision.

Signed on this 14th day of July 2010.


SUSAN COMBS
Texas Comptroller of Public Accounts

by: Martin A. Hubert
Deputy Comptroller

ENDNOTE(S):

(1) TEX. TAX CODE ANN. Section 152.021.

(2) TEX. TAX CODE ANN. Section 152.001(2).

(3) TEX. TAX CODE ANN. Section 152.092(a).

(4) TEX. TAX CODE ANN. Section 152.092(b).

(5) COMPTROLLER'S DECISION NO. 100,189 (2008), State Tax Automated Research 
Accession No. 200805124H (May 28, 2008).




ACCESSION NUMBER: 201007870H
SUPERSEDED: N
DOCUMENT TYPE: H
DATE: 07/14/2010
TAX TYPE: MOTOR VEHICLE