Dateline: February 7, 2008

Car tax refund deadline April 1

You may be entitled to a tax refund.

Thanks to action taken by Texas voters last fall, some self-employed taxpayers may be able to exempt their vehicle from being subject to personal property taxes. The exemption begins with the 2007 tax year; and if you’ve already paid your 2007 taxes, you could be eligible for a refund.

The passage of Proposition 6, which amended the state constitution under House Bill 1022, provides for an individual to one passenger car or light truck from personal property taxes if the vehicle is used for both business and personal reasons.

“We’re calling it a multi-use exemption,” said Donley Appraisal District Chief Appraiser Paula Lowrie.

Citizens must fill out an application to receive the exemption, and people who want that exemption to apply for the 2007 tax year must fill out the form at the appraisal office by April 1, 2008.

Lowrie said HB 1022 was passed after real estate agents in the state pushed for it.

“These are vehicles that would usually be taxed as business personal property, but they (real estate agents) got this exemption passed because they also drive their vehicles for personal use,” she said.

Lowrie said her office initially thought the law would not affect Donley County because, unlike many of the areas of the state, most local entities here tax vehicles for personal use.

“It kind of threw us for a loop,” Lowrie said. “It was apparently oversight that they didn’t exclude this exemption in places that tax these vehicles on the personal side.”

As it is, Lowrie says there are a lot of small businesses that are eligible for this exemption.

To qualify for the exemption individuals need to fill out an application form from the appraisal office that includes such basic information as the owner’s name, the vehicle identification number, the name and description of the business, and a short description of how the vehicle is used for the production of income.

“There are two main questions to answer,” Lowrie said. “Do you use this vehicle in the production of income? And do you use it for personal reasons?”

The law allows for one vehicle tax exemption per individual, so Lowrie said a husband and wife who both work for their own small business could exempt two vehicles total.

Certain situations are not eligible for the exemption.

“If you work for someone else, that’s the main eliminating factor,” Lowrie said.

People who used their vehicle to commute to and from work, are not eligible.

A retired person with no production of income is not eligible.

A vehicle that is registered in a business’ name and is used exclusively for business purposes is not eligible.

Lowrie said people who fill out an approved exemption form for 2007 and who have already paid their 2007 taxes will be issued a refund of that portion of their taxes in about 30 days.

The appraisal district does not yet know how much the new exemption will cost the local taxing entities in terms of revenue already collected or future revenue. That will not be known until after the April 1 deadline passes.

For taxing years 2008 and beyond, exemption applications must be filed between January 1 and April 30 each year. It is not automatically renewed. 

Application forms are available at the appraisal district office at 307 S. Sully Street in Clarendon.