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Actually I believe the law does not prohibit the manufacturers to sell directly to consumers, it requires the seller to be located in Texas. A subtle, but impor
by old-gregg 14y ago
Actually I believe the law does not prohibit the manufacturers to sell directly to consumers, it requires the seller to be located in Texas. A subtle, but important difference. I believe the original reasoning for this was to prevent sales tax avoidance by purchasing cars out of state. This was pre-Internet.
- vonmoltke 14y agoNo, they do prevent exactly that. In Texas, car manufacturers are not allowed to have company stores, only franchisee-run dealerships.
- bd_at_rivenhill 14y agoStates will typically enforce payment of use tax at the time of vehicle registration for vehicles which were recently bought in another state and for which no sales tax was paid. This happened to me when I moved to Pennsylvania right after I purchased a car. This is one of the few places where use tax laws are not simply a laughable attempt to shame people into paying sales tax on out-of-state purchases. Texas has better tools to prevent sales tax avoidance in this case; the laws exist to protect dealers from having to compete with manufacturers. I suspect that a seller located in Texas may also not be a wholly-owned subsidiary of a company based in another state.