34 Tex. Admin. Code § 3.297 - Carriers, Commercial Vessels, Locomotives and Rolling Stock, and Motor Vehicles
(a) Definitions.
The following words and terms, when used in this section, shall have the
following meanings, unless the context clearly indicates otherwise.
(1) Chapter 160 boat--A vessel not more than
115 feet in length, measured from the tip of the bow in a straight line to the
stern, other than a canoe, kayak, rowboat, raft, punt, or other watercraft
designed to be propelled only by paddle, oar, or pole. The term includes
federally documented vessels, sailboats, personal watercraft, and boats
designed to accommodate an outboard motor. The term does not include seaplanes.
Seaplanes, and canoes, kayaks, rowboats, rafts, punts, or other watercraft
designed to be propelled only by paddle, oar, or pole, are not "taxable boats"
under Tax Code, Chapter 160 (Taxes On Sales And Use Of Boats And Boat Motors),
but are subject to tax under Tax Code, Chapter 151 (Limited Sales, Excise, and
Use Tax).
(2) Commercial vessel--A
vessel that displaces eight or more tons of fresh water before being loaded
with fuel, supplies, or cargo, and that is:
(A) used exclusively and directly in a
commercial or business enterprise or activity, including, but not limited to,
commercial fishing; or
(B) used
commercially for pleasure fishing by individuals who are paying
passengers.
(3) Common
carrier--A person who holds out to the general public a willingness to provide
transportation of persons or property from place to place for compensation in
the normal course of business.
(4)
Licensed and certificated common carrier--A person authorized through issuance
of a license or certificate by the appropriate United States agency or by the
appropriate state agency within the United States to operate a vessel, train,
motor vehicle, or pipeline as a common carrier. Certificates of inspection or
safety do not authorize a person to operate as a licensed and certificated
common carrier.
(5) Locomotive--A
self-propelled unit of railroad equipment consisting of one or more units
powered by steam, electricity, diesel electric, or other fuel, designed solely
to be operated on and supported by stationary steel rails or electromagnetic
guideways and to move or draw one or more units of rolling stock owned or
operated by a railroad. The term includes a yard locomotive operated to perform
switching functions within a single railroad yard, but does not include
self-propelled roadway maintenance equipment.
(6) Marine cargo container--A container that
is fully or partially enclosed; is intended for containing goods; is strong
enough to be suitable for repeated use; and is specially designed to facilitate
the carriage of goods by one or more modes of transportation without
intermediate reloading. The term includes the accessories and equipment that
are carried with the container. The term does not include trailer chassis,
motor vehicles, accessories, or spare parts for motor vehicles.
(7) Motor vehicle--A self-propelled vehicle
designed to transport persons or property upon the public highway and a vehicle
designed to be towed by a self-propelled vehicle while carrying property. The
term includes, but is not limited to: automobiles; motor homes; motorcycles;
trucks; truck tractors; trailers; semitrailers; house trailers or travel
trailers, as defined by §
3.72 of this title (relating to
Trailers, Farm Machines, and Timber Machines); park models, as defined by
§
3.481 of this title (relating to
Imposition and Collection of Manufactured Housing Tax); trailers sold
unassembled in a kit; dollies; jeeps; stingers; auxiliary axles; converter
gears; and truck cab/chassis. The term does not include a nonrepairable vehicle
and a salvage vehicle, as defined by §
3.86 of this title (relating to
Destroyed and Repaired Motor Vehicles).
(8) Operating exclusively in foreign or
interstate coastal commerce--Transporting persons or property between a point
in Texas and a point in another state or foreign country. A vessel that travels
between a point in Texas and an offshore area or fishing area on the high seas,
or between two points in Texas, is not operating exclusively in foreign or
interstate coastal commerce.
(9)
Railroad--A form of non-highway ground transportation of persons or property in
the normal course of business by means of trains solely operated on and
supported by stationary steel rails or electromagnetic guideways, including,
but not limited to:
(A) high speed ground
transportation systems that connect metropolitan areas;
(B) commuter or other short-haul rail
passenger service in a metropolitan or suburban area;
(C) narrow gauge shortline railroads,
including tourist, historical, or amusement park railroads; and
(D) private industrial railroads operated on
steel rails that connect directly to the national rail system of
transportation, but not a private industrial railroad operated on steel rails
totally inside an installation that is not connected directly to the national
rail system of transportation.
(10) Rolling stock--A unit of railroad
equipment that is mounted on wheels and designed to be operated in combination
with one or more locomotives upon stationary steel rails or electromagnetic
guideways owned or operated by a railroad. Examples include, but are not
limited to, passenger coaches, baggage and mail cars, box cars, tank cars, flat
cars, and gondolas. Rolling stock also includes self-propelled trackmobile rail
car movers and roadway maintenance equipment. Rolling stock does not include
equipment used for intra-plant transportation or other nontraditional railroad
activities and that is mounted on stationary steel rails or tracks but that are
not part of, or connected to, a railroad. For example, cranes operated on steel
rails or tracks and used to load or unload ships are not rolling
stock.
(11) Train--One or more
locomotives coupled to one or more units of rolling stock that are designed to
carry freight or passengers, are operated on steel rails or electromagnetic
guideways, and are owned or operated by a railroad.
(12) Vessel--A watercraft, other than a
seaplane on water, used, or capable of being used, for navigation and
transportation of persons or property on water. The term includes a ship, boat,
watercraft designed to be propelled by paddle or oar, barge, and floating
dry-dock.
(b) Carriers
generally.
(1) Use tax is not due on the
storage or use of repair or replacement parts acquired outside of Texas and
actually affixed in Texas to a self-propelled vehicle that is used by a
licensed and certificated common carrier. Trailers, barges, and semitrailers
are not considered to be self-propelled vehicles.
(2) Use tax is due on the storage or use of
tangible personal property brought into Texas to be assembled into a vehicle
used by a common carrier to transport persons or property from place to place,
unless the tangible personal property is otherwise exempt from sales and use
tax under this section.
(3) Sales
tax is not due on the sale of tangible personal property to a common carrier if
the tangible personal property is shipped to a point outside of Texas using the
purchasing carrier's facilities under a bill of lading, and if the tangible
personal property is to be used by the purchasing carrier in the conduct of its
business outside of Texas.
(c) Vessels.
(1) Chapter 160 boats. The sale or use in
Texas of a Chapter 160 boat is subject to boat and boat motor sales or use tax
under Tax Code, Chapter 160, even if the vessel meets the definition of a
commercial vessel. The lease or rental of a Chapter 160 boat is subject to
limited sales, excise, and use tax under Tax Code, Chapter 151. For information
concerning the imposition of the boat and boat motor sales and use tax, see
§
3.741 of this title (relating to
Imposition and Collection of Tax).
(2) Commercial vessels. Sales or use tax is
not due on the sale by the builder of a commercial vessel that is not a Chapter
160 boat.
(3) Component parts.
Sales and use tax is not due on the sale or use of materials, equipment, and
machinery that become component parts of a commercial vessel, a marine cargo
container, or a Chapter 160 boat that meets the definition of a commercial
vessel. A component part is tangible personal property that is actually
attached to and becomes a part of a commercial vessel, a marine cargo
container, or a Chapter 160 boat that meets the definition of a commercial
vessel. For example, items such as radios, radar equipment, navigation
equipment, wenches, long-line fishing gear, and rigging equipment, that are
attached to the vessel by means of bolts or brackets, or are otherwise attached
to the vessel, including items required by federal or state law, are component
parts. Permanent coatings such as paint and varnishes are also component parts.
The term does not include furnishings of any kind that are not attached to the
vessel, nor does it include consumable supplies. For example, it does not
include bedding, linen, kitchenware, tables, chairs, ice for cooling,
refrigerants for cooling systems, fuels, lubricants, first aid kits, tools, or
polishes, waxes, glazes, or other similar temporary coatings.
(4) Repair and maintenance. Sales and use tax
is not due on the labor to repair, remodel, restore, renovate, convert, or
maintain a commercial vessel or a Chapter 160 boat that meets the definition of
a commercial vessel, or a component part of a commercial vessel or a Chapter
160 boat that meets the definition of a commercial vessel. Sales and use tax is
due on the sale or use of machinery, equipment, tools, and other items used or
consumed in performing the non-taxable service. For more information about the
repair, remodeling, maintenance, and restoration of vessels that are not
commercial vessels, see §
3.292 of this title (relating to
Repair, Remodeling, Maintenance, and Restoration of Tangible Personal
Property).
(5) Vessels operating
exclusively in foreign or interstate coastal commerce.
(A) Sales or use tax is not due on the sale
of materials and consumable supplies, including items commonly known as ships'
stores and sea stores, to the owner or operator of a vessel operating
exclusively in foreign or interstate coastal commerce, if the materials and
consumable supplies are for use and consumption in the operation and
maintenance of the vessel, or if the materials and supplies enter into and
become component parts of the vessel.
(B) Operation of the vessel in a manner other
than in foreign or interstate coastal commerce will result in a loss of the
exemption for ships' stores and sea stores for the quarterly period in which
the nonexempt operation occurs.
(C)
Any owner or operator of a vessel operating exclusively in foreign or
interstate coastal commerce shall, when giving an exemption certificate,
include on the certificate the title or position of the person issuing the
certificate and the name of the vessel on which the items are to be
loaded.
(D) Sales tax is due on
sales made to individual seamen operating these vessels.
(6) Closely associated service companies
provide servicing operations such as stevedoring, loading, and unloading
vessels. Sales or use tax is not due on the sale or use of materials and
supplies purchased by a person providing stevedoring services for a vessel
operating exclusively in foreign or interstate coastal commerce if the
materials and supplies are loaded aboard the vessel and are not removed before
its departure. This includes, but is not limited to, such items as lumber,
plywood, deck lathing, turnbuckles, and lashing shackles.
(d) Taxable uses of tangible personal
property purchased tax free. Sales and use tax is due when tangible personal
property sold, leased, or rented tax-free under a properly completed resale or
exemption certificate is subsequently put to a taxable use other than the use
allowed under the certificate. For more information refer to §
3.285 of this title (relating to
Resale Certificate; Sales for Resale) and §
3.287 of this title (relating to
Exemption Certificates).
(e)
Rolling stock, locomotives, and trains.
(1)
Sales or use tax is not due on the sale or use of locomotives and rolling
stock.
(2) Sales or use tax is not
due on the sale or use of fuel or supplies essential to the operation of
locomotives and trains, including items required by federal or state
regulation. Examples include, but are not limited to, telecommunication and
signaling equipment, rails, ballast, cross ties, and roadbed moisture barriers.
Items of tangible personal property used to construct, repair, remodel, or
maintain improvements to real property such as depots, maintenance facilities,
loading facilities, and storage facilities are not supplies essential to the
operation of locomotives and trains.
(3) Sales or use tax is not due on the amount
charged for labor or incorporated materials used to repair, remodel, maintain,
or restore locomotives and rolling stock. Sales or use tax is due on the sale
or use of machinery, equipment, tools, and other items used or consumed in
performing the non-taxable service.
(4) Sales or use tax is not due on the sale
or use of electricity, natural gas, and other fuels used or consumed
predominately in the repair, maintenance, or restoration of rolling stock. For
more information, see §
3.295 of this title (relating to
Natural Gas and Electricity).
(5)
Sales or use tax is not due on the amount charged for labor or incorporated
materials, whether lump-sum or separately stated, used for the construction of
new railroad tracks and roadbeds. For more information, see §
3.291 of this title (relating to
Contractors). Sales or use tax is not due on the separately stated sales price
of incorporated materials used to repair, remodel, restore, or maintain
existing railroad tracks and roadbeds. Sales and use tax is due on the sales
price for labor to repair, remodel, restore, or maintain existing railroad
tracks and roadbeds as nonresidential real property repair, remodeling, and
restoration. For more information, see §
3.357 of this title (relating to
Nonresidential Real Property Repair, Remodeling, and Restoration; Real Property
Maintenance).
(f) Motor
vehicles. The sale and use of motor vehicles are taxed under the Tax Code,
Chapter 152 (Taxes on Sale, Rental, and Use of Motor Vehicles). For information
on repairs to motor vehicles, see §
3.290 of this title (relating to
Motor Vehicle Repair and Maintenance; Accessories and Equipment Added to Motor
Vehicles; Moveable Specialized Equipment).
Notes
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