# How Texas motor vehicle sales tax works on a dealer sale — and when SPV doesn't apply
> Texas vehicle sales tax is 6.25% statewide. Subtract your trade-in value first—it cuts the taxable amount. For dealers: SPV doesn't apply.
- Source: https://www.dealervlo.com/blog/tx-car-sales-tax-dealer
- Published: 2026-07-01
- Updated: 2026-07-01
- Author: Chris Abouraad
- Tags: texas, sales tax
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If you run a [used-car lot in Texas](/guide/used-car-dealer-license-texas), motor vehicle sales tax is part of every single deal — and it's one of the things buyers ask about at the desk. Here's how it actually works on a dealer sale, including the trade-in credit that changes the math and the SPV rule that confuses everyone because it *doesn't* apply to you.

## The Texas motor vehicle sales tax rate: 6.25%, statewide

![Key figures showing how Texas motor vehicle sales tax is calculated on dealer sales, including the statewide rate and a real-world example.](/images/post/tx-car-sales-tax-dealer/1)

Texas charges **6.25% motor vehicle sales tax** on vehicle sales. It's a state tax — unlike general sales tax, there's no local add-on rate stacked on top of a dealer vehicle sale. The 6.25% is the number, everywhere from El Paso to Beaumont.

Note the name: *motor vehicle* sales tax. It's a separate tax from the general sales and use tax you might collect on parts or accessories, with its own rules and its own remittance path.

## The trade-in credit

![Comparison showing how the trade-in credit reduces Texas motor vehicle sales tax on a dealer sale from the full purchase price.](/images/post/tx-car-sales-tax-dealer/2)

On a dealer sale, the tax is calculated on the **sales price minus the trade-in allowance**.

Say a customer buys a $22,000 truck from you and trades in a vehicle you allow $8,000 on. The taxable amount is $14,000 — so the tax is $875, not $1,375. That $500 difference is real money at the desk, and it's one of the honest advantages you have over a private-party sale.

Two details worth knowing:

- The credit applies to **licensed dealer sales**. That's you.
- If the customer trades *down* — their trade is worth more than the vehicle they're buying — **no motor vehicle tax is due** on the swap.

## SPV — the rule that doesn't apply to your deals

Texas has a Standard Presumptive Value (SPV) system: on **private-party** sales, tax is calculated on the higher of the sales price or a percentage of the vehicle's book value, so people can't title a $15,000 car "sold for $500."

Buyers walk in believing SPV applies everywhere. It doesn't. **SPV applies to private-party sales, not licensed dealer sales.** On your deals, the tax base is the actual sales price minus the trade-in — full stop. When a customer questions the tax line on your paperwork, that's the explanation.

## How you remit it

![Checklist of steps dealers must follow to properly collect and remit Texas motor vehicle sales tax on dealer sales.](/images/post/tx-car-sales-tax-dealer/3)

On a dealer sale of a vehicle with a gross weight of 11,000 pounds or less, **the dealer collects the tax** and remits it to the county tax assessor-collector (CTAC) when you file the title and registration paperwork — the same trip as your [Form 130-U](/guide/how-to-fill-out-form-130-u-texas).

That means the tax lives inside your deal jacket: it has to be calculated correctly on the buyer's order, collected at closing, and carried through to the 130-U. Get the trade-in credit wrong on any of those documents and the numbers don't reconcile.

## The short version

- **6.25%**, statewide, on dealer sales
- Tax base = **sales price minus trade-in allowance**
- Trade-downs owe **no tax**
- **SPV is for private-party sales** — not your deals
- You collect it and remit to the county with the **130-U** at title time

DealerVLO calculates Texas motor vehicle sales tax with the trade-in credit automatically on every deal — the buyer's order, the tax line, and the 130-U all agree because they come from the same numbers.