Texas Vehicle Inventory Tax (VIT), explained for dealers
Last verified: November 9, 2026. Every rule links to its official source.
Texas Vehicle Inventory Tax (VIT) is a property tax on a dealer’s vehicle inventory, prepaid sale by sale. Most county tax offices and the pre-licensing course call it the special inventory tax (SIT); it is the same tax. Under Tax Code Chapter 23, you file a monthly statement with your prepayment by the 10th and an annual declaration by February 1 (file by January 31 to be safe).
VIT at a glance
| What | The rule | Source |
|---|---|---|
| Who owes it | The dealer. It is a property tax on the dealer, not on the buyer | Comptroller: VIT |
| Monthly statement | Form 50-246, by the 10th of every month, even with no sales | Tax Code 23.122 |
| Prepayment | Each vehicle’s sales price times the unit property tax factor, deposited into escrow with the statement | Tax Code 23.122 |
| Annual declaration | Form 50-244, by February 1 (file by January 31 to be safe) | Tax Code 23.121 |
| New dealer | First declaration within 30 days of starting business; no prepayment for that calendar year | Tax Code 23.121 and 23.122 |
| Fewer than five sales in a year | The appraisal district must report you to TxDMV to start canceling your GDN | Tax Code 23.121 |
Is the Texas vehicle inventory tax the same as the special inventory tax?
Yes. It is one tax with several names. TxDMV’s page for new dealers and the Comptroller’s motor vehicle tax guide say Vehicle Inventory Tax (VIT). The Comptroller’s property tax page says Special Inventory, and the Harris, Dallas, Travis and Tarrant county tax offices say special inventory tax. Tarrant notes it was formerly known as VIT. The Tax Code itself says “vehicle inventory tax” and “unit property tax”.
The forms use neither name. Form 50-244 is the Dealer’s Motor Vehicle Inventory Declaration, and Form 50-246 is the Dealer’s Motor Vehicle Inventory Tax Statement. The Harris Central Appraisal District numbers them 23-121 and 23-122. This guide says VIT from here on. It is separate from the motor vehicle sales tax the buyer pays.
What are the two VIT filings, and who gets each?
The annual declaration goes to the county appraisal district (the chief appraiser), with a copy to the county tax assessor-collector (the collector). The monthly statement runs the other way: the original goes to the collector and a copy to the appraisal district.
The annual declaration (Form 50-244). Tax Code 23.121(f) requires it “not later than February 1 of each year”. Tarrant County’s page gives January 31, a day earlier, so filing by January 31 satisfies both. The declaration reports last year’s sales. The statute values your inventory on January 1 at your prior-year sales from inventory, less sales to dealers, fleet transactions and subsequent sales, divided by 12.
The monthly statement (Form 50-246). Tax Code 23.122 requires it every month “regardless of whether a motor vehicle is sold”, filed on or before the 10th. It lists each vehicle sold the month before, its sales price, its unit property tax, and the reason when none applies. With it, you deposit the month’s total unit property tax.
When does a new dealer file the first VIT declaration?
Within 30 days after you start business. Tax Code 23.121 presumes that is the day your GDN was issued, unless the chief appraiser sets another date, so count from the license and not from your first sale. TxDMV’s new-dealer startup sheet also puts your county accounts within 30 days of the license’s active date. Where this fits among your first steps is in How to start a used car dealership in Texas.
The first-year rule. If you were not in business on January 1, you owe no VIT for that calendar year. The statute says such a dealer “may neither assign a unit property tax to a motor vehicle sold by the dealer nor remit money with the statement”. You still file a statement every month, because the filing rule applies to all dealers. From your first January 1 in business, you file the regular declaration by February 1 and assign the unit tax to each sale that carries one.
How is the monthly VIT prepayment figured?
Multiply each vehicle’s sales price by your county’s unit property tax factor, add up the month, and deposit the total with the statement.
- Get this year’s factor from your county tax office or appraisal district. By statute it is one-twelfth of the prior year’s combined tax rate of the local taxing units where your inventory is located. The Dallas Central Appraisal District, for example, posts its 2026 factor on its forms page.
- Multiply each vehicle’s sales price by the factor. The result is that vehicle’s unit property tax.
- Leave out sales that carry no unit tax, and give the reason on the statement.
- Deposit the month’s total with the collector when you file by the 10th.
Because the factor is built from the prior year’s local rates, it changes when those rates change. You should use your own county’s figure for the current year. The deposit goes into escrow: you may not withdraw it, and the collector keeps the interest.
Which sales carry no VIT, and can you charge it to the buyer?
Three kinds of sale are left out of the annual value and carry no unit tax (Tax Code 23.121 and 23.122):
- Sales to dealers.
- Fleet transactions: five or more motor vehicles to the same person within one calendar year.
- Subsequent sales: a second dealer-financed sale of the same vehicle from your inventory in the same calendar year.
You may pass VIT on to a retail buyer, but it stays your tax. The Comptroller calls it “a negotiable item on the sales agreement” and says the reimbursement “must be listed separately because it cannot be included in the sales price.” Sales tax is not assessed on the separately stated amount. Whether or not the buyer pays it, the deposit is yours to make.
What happens to the VIT escrow at the end of the year?
The escrow pays your tax bill. A shortfall is billed to you, and money in escrow is not refunded.
- The year’s tax is figured on the January 1 value set from last year’s sales, but the escrow fills from this year’s sales, so the two will not always match.
- If escrow falls short, the collector sends “a tax bill for the amount of the deficiency”. Taxes due but not received by January 31 are delinquent (Tax Code 23.122).
- By February 15 the collector distributes the escrowed money to the local taxing units. Dallas County says it distributes any surplus proportionally to them.
The December statement (due January 10) and the declaration (due February 1) are both on the Texas dealer year-end checklist.
What are the penalties for late or missing VIT filings?
Both filings carry monthly civil penalties and criminal fines.
| Failure | Penalty | Source |
|---|---|---|
| Declaration late or missing | $1,000 civil penalty for each month or part of a month. Also a misdemeanor with a fine of up to $500, each day a separate violation | Tax Code 23.121 |
| Statement late or missing | $500 civil penalty for each month or part of a month, secured by a tax lien on your business personal property. Also a misdemeanor with a fine of up to $100 per day | Tax Code 23.122 |
| Unit tax paid late | 5 percent of the amount due, plus 5 percent more if still unpaid 10 days after the due date | Tax Code 23.122 |
Can missing VIT filings cost you your GDN?
Yes. Your VIT filings are tied to your dealer license.
- Not filing. The chief appraiser “may report” a dealer who fails to file the declaration to TxDMV to start cancellation (Tax Code 23.121). TxDMV may cancel a GDN when a dealer fails to show compliance with Tax Code sections 23.12, 23.121 and 23.122 (Transportation Code 503.038).
- Fewer than five sales. If your declaration reports fewer than five sales in the prior year, the chief appraiser “shall report” you to TxDMV. What is a GDN? covers the five-sale rule from both sides.
- Records. Under the same section, the chief appraiser may examine a GDN holder’s books and records by written request, delivered at your licensed location, with at least 15 days to respond. See Who can inspect a Texas dealership.
- Plates. TxDMV’s dealer plate page, in its rules on extra plates at renewal, says “VIT must be submitted each time with the renewal.”
Where do you file in Houston, Dallas, San Antonio, Austin and Fort Worth?
The statement goes to the county tax office and the declaration to the county appraisal district.
| County (city) | Monthly statement | Annual declaration | Note |
|---|---|---|---|
| Harris (Houston) | Harris County Tax Assessor-Collector, by mail or online portal | Harris Central Appraisal District | Write “No Sales” for a month without sales |
| Dallas (Dallas) | Dallas County Tax Office, online through its portal | Dallas Central Appraisal District | Its forms page lists the 2026 factor |
| Bexar (San Antonio) | Bexar County Tax Assessor-Collector | Bexar Appraisal District | The district says the statement is due even with no sales |
| Travis (Austin) | Travis County Tax Office, by mail; visits by appointment only | Travis Central Appraisal District | New dealers file the declaration within 30 days of the license |
| Tarrant (Fort Worth) | Tarrant County Tax Assessor-Collector, online portal | Tarrant Appraisal District | Its page gives January 31 for the declaration; the statute says February 1 |
What trips people up
- Skipping a month with no sales. The statement is still due, and each month or part of a month late costs $500.
- Sending the original to the wrong office. The declaration goes to the appraisal district, the statement to the tax assessor-collector.
- Waiting for the first sale. The first declaration is due 30 days from the start of business, presumed to be your GDN date.
- Prepaying in your first calendar year. The statute bars it. File the statements anyway.
- Using another county’s or last year’s factor. Get the current one from your county.
- Folding VIT into the price. A reimbursement must be listed separately.
Frequently asked questions
Is the special inventory tax (SIT) the same as the vehicle inventory tax (VIT)?
Yes, it is one tax. Most county tax offices and the pre-licensing course call it the special inventory tax (SIT), while TxDMV and the Comptroller’s motor vehicle tax guide call it the Vehicle Inventory Tax (VIT). The forms are the Dealer’s Motor Vehicle Inventory Declaration (50-244) and Tax Statement (50-246).
I got my dealer license but had no vehicles on January 1. Do I still file?
Yes. File a declaration within 30 days of starting business, presumed to be the day your GDN was issued, and a statement by the 10th of every month. For the calendar year in which you were not in business on January 1, you assign no unit property tax and send no money.
Why do I have to file every month if I sold nothing?
The Tax Code requires the monthly statement “regardless of whether a motor vehicle is sold.” A late or missing statement carries a $500 civil penalty for each month or part of a month. A tax lien on your business personal property secures that penalty, so file even in a month with no sales.
I paid into escrow on every sale. Why do I owe more?
Your tax for the year is figured on a January 1 value set from the previous year’s sales, while the escrow fills from this year’s sales, so the two can differ. When escrow falls short, the collector bills you for the deficiency, and tax not received by January 31 is delinquent.
If my escrow is more than my tax bill, do I get a refund?
No. Money in escrow is not refunded, and the Tax Code bars you from withdrawing it. Dallas County, answering this question, says it distributes any surplus proportionally to the local taxing units and describes no refund. Ask your own county tax office how it handles a surplus.
Can I charge the inventory tax to the buyer?
Yes. The Comptroller calls VIT a property tax on the dealer and “a negotiable item on the sales agreement.” If you charge it, list it separately, because it cannot be included in the sales price. Sales tax is not assessed on the separately stated amount. The deposit with the collector is yours either way.
Your next step
LeftLane is a dealer management system for independent and buy-here-pay-here dealers. If you want to see how each deal file and its records sit in one place, book a demo. If you are moving from another system, LeftLane’s team moves your data over, and real people answer the phone at 512-222-9549.
Sources
- Texas Tax Code Chapter 23: sections 23.121 and 23.122
- Texas Transportation Code Chapter 503: section 503.038
- Texas Comptroller: Vehicle Inventory Tax, Publication 96-254
- Texas Comptroller: Special Inventory
- TxDMV: Starting your new dealership
- TxDMV: New dealer startup information, Form LP801
- TxDMV: Dealer license plates
- Harris County Tax Assessor-Collector: Special Inventory Tax
- Dallas County Tax Office: dealer escrow FAQs
- Dallas Central Appraisal District: forms
- Bexar Appraisal District: dealer statements and declarations
- Travis County Tax Office: motor vehicle filing requirements
- Tarrant County: FAQs for dealers and businesses
This guide is general information for dealers, not legal advice. Rules and fees change. Confirm with the agency or a licensed attorney in your state before you act.