Industry Wire

TRALA Fighting Texas Lease Tax

The Texas Legislature is getting a fight from TRALA in opposition to a new gross receipts lease tax proposal. Legislation, Senate Bill 996 introduced by Senator Kip Averitt (R-Waco), would impose a new 6.25% gross receipts tax on motor vehicle leases with terms of more than 180 days. Currently, the 6.25% gross receipts tax is imposed on motor vehicle rentals with terms of up to 180 days. The tax would be imposed on truck leases originating in Texas and on truck leases originating out-of-state but in which the vehicle is used by a Texas business. Click here to see a copy of SB 996.

In addition to the new gross lease receipts tax, SB 996 also clarifies the imposition of a surcharge on diesel-powered vehicles weighing over 14,000 pounds. If such a vehicle is model year 1996 or earlier, the surcharge is 2.5% of gross lease receipts. For vehicles of model year 1997 or later, the surcharge is 1% of gross lease receipts. Current statute already refers to leased vehicles being subject to this surcharge, but the provision of SB 996 would clarify that the surcharge is a percentage of gross lease receipts.

TRALA is working with the Texas Motor Transport Association to defeat Senate Bill 996 and the gross lease receipts tax. TRALA has also contacted the bill sponsor, Senator Averitt, to explain the difficulty of absorbing a new tax on commercial truck leases in the current economic climate. For more information, contact TRALA’s Tom James at 703-299-9120 or at tjames@trala.org.