Who can inspect a Texas dealership, and what each one looks at

Last verified: November 9, 2026. Every rule links to its official source.

TxDMV can inspect any Texas dealership, and the Office of Consumer Credit Commissioner (OCCC) examines dealers that finance their own sales. The Comptroller, the county appraisal district and tax office, the Attorney General and your city each reach part of the business. TxDMV gives you 15 days to send records it asks for and can fine up to $10,000 per violation, with each day counted separately.

Who can inspect a Texas dealership, at a glance

Who	What they look at	What they can do	Source
TxDMV Enforcement Division	Complaints, sales records, vehicle ownership papers	Records request (15 days); deny, suspend or revoke; fine up to $10,000 per violation; cease and desist	43 TAC 215.141
TxDMV Dealer Compliance Services	License plates, plate storage, premises	On-site reviews, with education and guidance first	TxDMV: HB 718
OCCC (finance licensees only)	Contracts, title transfers, credit insurance sales, fee records	Periodic exam on 1 to 4 weeks’ notice; written instructions; suspend or revoke the license	OCCC: examinations
Comptroller	Seller-financed sales tax and its records	Late-report penalties; deficiency determinations; can pursue the buyer for unpaid tax	Tax Code 152
County appraisal district	Your inventory tax declaration and your books	Written records request (at least 15 days); report you to TxDMV to start GDN cancellation	Tax Code 23.121
County tax assessor-collector	Titles, sales tax, monthly inventory tax statements	Revoke webDEALER access without notice; penalties and a tax lien	43 TAC 217.74
Attorney General	Deceptive trade practices; Saturday and Sunday sales	Sue for civil penalties; civil investigative demands	Business and Commerce Code 17
Your city	Certificate of occupancy, sign permit, any city dealer license	Enforce its own permits (Houston: a 15-day notice, then citations)	Houston: occupancy inspections

How does a TxDMV investigation work?

TxDMV’s Enforcement Division works from complaints and can ask for your records, due within 15 days. The sequence, per TxDMV’s pages and rules:

1. A complaint comes in through TxDMV’s complaint portal. Complaints are assigned in the order received; TxDMV says to allow up to 3 weeks. TxDMV’s FAQ answers one such complaint: a buyer with no plates or title more than 30 days after the purchase.
2. A records request. Within 15 days of a request from a TxDMV representative, you must deliver copies of the records named to the address in the request (43 TAC 215.144). In your license application you also agreed to let TxDMV examine the ownership papers for each vehicle during working hours.
3. A decision. TxDMV may deny an application, suspend or revoke a license, assess a civil penalty or issue a cease and desist order (43 TAC 215.141). Grounds include failing to maintain the premises or keep records, refusing a records request, and not staying regularly and actively in business.
4. Sometimes, a hearing. TxDMV’s FY 2025 Chairman’s Report says the Enforcement Division referred 953 cases to the Office of Administrative Hearings, up from 884 a year earlier, counting all enforcement cases, not only dealers.

You should read each TxDMV letter the day it arrives and meet its deadlines.

The penalties. An administrative penalty may not exceed $10,000 for each violation, and each day a violation continues counts as another. The amount weighs seriousness, economic damage, your history, deterrence and your efforts to correct the problem. Violating Transportation Code Chapter 503, which governs the GDN and dealer plates, can also bring a civil penalty of $50 to $1,000 and a misdemeanor fine of $50 to $5,000. TxDMV’s recommended sanctions are in its disciplinary matrix dated November 17, 2025.

If an agent or employee buys or sells for you, the written authorization you give the other party is a required record you must produce on request.

What do TxDMV’s plate and premises reviews check?

TxDMV’s Dealer Compliance Services Section, part of the Enforcement Division, inspects dealer locations for compliance with license plate and premises requirements. Its staff offer education and guidance to dealers found out of compliance. TxDMV can also require a site visit with a new, renewal or new-location application.

Plates. You are liable for missing or misused plates, and TxDMV’s dealer handout says there will be periodic reviews of plate inventory. A reviewer can check that:

• Plates are locked in a room or closet, or a safe or steel cabinet bolted to the floor or wall (43 TAC 215.150).
• Only owners and bona fide employees with a business need use the plate system, with no shared passwords.
• Lost, stolen or destroyed plates were reported within 24 hours, and voided plates were destroyed, recycled or returned within 10 days (43 TAC 215.158).
• Your dealer plate log is complete (43 TAC 215.138).

Failing to securely store a plate is a sanction ground. Since October 29, 2026, so are issuing the wrong plate type, securing a plate to a sold car without assigning it in the system, and voiding and reissuing a plate to stretch a filing deadline (TxDMV rule adoption). A dealer fraudulently obtaining plates or using the plate database can lose access after notice sent electronically and by certified mail, with a hearing available.

Premises. Your license application included a notarized affidavit that the premises rules are met and will be maintained. The basics a reviewer sees first:

• Hours posted at the main entrance: at least four days a week, four consecutive hours a day, not by appointment only, and a “be back” sign giving your return time if no one is there.
• A phone answered from 8 a.m. to 5 p.m. on weekdays, by a person, answering service or voicemail.
• A permanent sign with legible letters at least six inches high, visible within 100 feet of the main entrance.
• A display area for at least five vehicles, reserved for inventory. Since October 29, 2026, a shared display area is marked off with permanent signage; older materials describe a physical barrier.
• On the wall: your GDN with the bond notice beside it, and the documentary fee notice where sales are finalized (Finance Code 348.006). A business selling more than three used vehicles a year must also post TCEQ’s emissions notice, at least 8 by 10 inches, near each customer entrance and in each sales office.

The full premises rule is in the step-by-step GDN guide, and the whole path is in How to start a used car dealership in Texas.

When does the OCCC examine a dealer?

If you hold an OCCC motor vehicle sales finance license, the OCCC examines you periodically, after one to four weeks’ notice. The examiner reviews a sample of your financing documents and gives you 60 days to act on any written instructions (OCCC: examinations).

• Access. You must give the examiner free access to your office, files, safes and vaults. Exams happen during normal business hours.
• What gets sampled. A risk-based, representative sample: retail installment contracts most heavily, plus title transfers, credit insurance sales and records tied to fees.
• Records. You must be able to produce required records within a reasonable time at your licensed location, kept for 4 years from the contract or 2 years from the final entry, whichever is later (7 TAC 84.708). Repossession files must show the notice of the plan to sell (or a signed waiver), proof of a commercially reasonable sale and the surplus or deficiency explanation.
• Documentary fee. The OCCC alone enforces the fee rule. Above $225 you must notify the OCCC first; restitution for an unnotified fee is capped at the amount over $225 for each buyer (7 TAC 84.205).
• Data security. With information on 5,000 or more consumers, you must keep a written incident response plan.

There is no separate exam fee. The OCCC can suspend or revoke a license for unpaid fees or for violating the chapter knowingly or without due care. Financing without a license means a $10,000 late filing fee plus license fees for every year you operated. See Financing your own sales in Texas.

What can the Comptroller do?

The Comptroller collects the sales tax on seller-financed sales and can determine a deficiency against a seller that underpays. A late seller-financed report costs $50 whether or not tax was due, plus 5 percent of the tax if 1 to 30 days late or 10 percent after that, and interest beginning 61 days after the due date.

The Comptroller may also proceed against the buyer in a seller-financed sale for unpaid tax. On cash deals, the county reports a dealer that collects tax and does not remit it. Keep tax records for at least 4 years from the date each record is made. Advertising that you will pay or not charge the tax is a Class C misdemeanor.

What can the county appraisal district and tax office ask for?

The appraisal district. The chief appraiser may examine your books and records. The request must be in writing, delivered at your licensed location, and give you at least 15 days to respond. A dealer that fails to file the annual declaration may be reported to TxDMV to start cancellation of the GDN, and one reporting fewer than five sales in the prior year must be. A missing declaration costs $1,000 for each month or part of a month.

The tax assessor-collector. This office takes your title applications and sales tax, grants your webDEALER access and can revoke it at any time with no notice. It also receives the monthly inventory tax statement and escrow. A late statement costs $500 for each month or part of a month, and a tax lien attaches to your business personal property to secure it. The full tax picture is in Texas Vehicle Inventory Tax (VIT), explained.

Can the Attorney General or a customer take you to court?

Yes. The Attorney General’s consumer protection division may sue under the Deceptive Trade Practices Act for up to $10,000 per violation. When the conduct targeted a consumer 65 or older, the penalty can rise by up to $250,000 more. The division can also issue civil investigative demands.

A customer can bring a private suit for economic damages, and, if you acted knowingly, mental anguish damages and up to three times the economic damages. The customer must give you written notice at least 60 days before filing.

The Attorney General or a district, county or city attorney can also enforce the Blue Law, which bars selling on both Saturday and Sunday. Civil penalties run up to $500 for a first violation and $1,000 to $5,000 by the third.

What does your city check?

The city that issued your certificate of occupancy and sign permit can enforce them. In Houston, for example, a business with no certificate of occupancy posted may get a 15-day notice, and citations may follow. Houston also licenses dealers through the Houston Police Department Auto Dealers Detail, which can conduct an annual, unannounced inspection at any time.

For other cities, ask the office that issued your certificate. City and county approvals a Texas car lot needs lists the local offices.

How to be ready: a self-check on five recent deals

You should pull five recent deal jackets and run these checks. Each ties to a rule an inspector can enforce.

1. Every required document is there: photo ID, odometer statement, title application copy and the county receipt marked paid, plus your copy of the buyer’s license plate receipt on sales since October 29, 2026.
2. Titles went in on time. Compare each sale date with the county receipt. Treat 20 business days as your working deadline and 30 days as the limit (45 if you financed the sale yourself).
3. Each plate matches the system. The plate on each car should be assigned to it in the system, with a printed receipt in the file.
4. Each trade-in has a Vehicle Transfer Notification filed in ePLATE.
5. The inventory tax statements for those months went in by the 10th and list each sale.
6. Financed deals are complete: the signed contract, a Disclosure of Equity given before signing when there was a trade-in, and the seller-financed return filed by the 20th.
7. You can produce the files fast. Print all five at the lot and time it; TxDMV allows 15 days.

Then walk the lot as a reviewer would: hours, sign, wall notices, display area, plate storage.

What trips people up

• Sitting on a records request. You have 15 days, and refusing a request is a sanction ground on its own.
• Letters going to an old address. You should keep your contact details current with TxDMV and the OCCC so requests reach you.
• Letting the premises slip after licensing. Your affidavit said the rules would be maintained for the whole license period.
• Loose plate control. Missing or misused plates are your liability, and unsecured plates are a sanction ground.
• Skipping the annual inventory tax declaration. The appraisal district can report you to TxDMV to start cancellation of the GDN.
• Advertising a price you will not honor. TxDMV’s rule says you must sell at the featured price to any retail buyer.

Frequently asked questions

Can TxDMV look at my records during business hours?

Yes. Applying for a GDN includes agreeing to let TxDMV examine the ownership papers for each vehicle during working hours, and its Dealer Compliance Services staff review plates and premises on site. When TxDMV asks for copies of records, you must deliver them within 15 days.

How long do I have to answer a TxDMV records request?

15 days from receiving it. You deliver copies of the records named to the address in the request, and electronic records count if you can print them at your licensed location. Refusing a records request is itself a ground for sanctions, up to suspension or revocation.

What is the largest fine TxDMV can impose on a dealer?

An administrative penalty may not exceed $10,000 for each violation, and each day a violation continues counts as a separate violation. The amount depends on seriousness, damage, your history and your efforts to correct the problem. TxDMV can also suspend or revoke the license.

How often does the OCCC examine car dealers?

The OCCC examines every motor vehicle sales finance licensee periodically, with one to four weeks’ notice. It reviews a risk-based sample of financing documents, mostly retail installment contracts, and gives you 60 days to act on written instructions. There is no separate exam fee.

Can the county appraisal district audit my dealership?

The chief appraiser may examine the books and records of any GDN holder. The request must be in writing, delivered at your licensed location, and give you at least 15 days. The chief appraiser must report a dealer whose declaration shows fewer than five sales in the prior year to TxDMV to start cancellation.

Your next step

With an inspection coming, it helps to have every deal file and record in one place. Book a LeftLane demo to see how LeftLane, a dealer management system for independent and buy-here-pay-here dealers, keeps them together. LeftLane’s team moves your data over from another system, and real people in the U.S. answer at 512-222-9549.

Sources

• TxDMV: HB 718, HB 718 dealer handout, dealer FAQ, complaints, FY 2025 Chairman’s Report, disciplinary matrix, rule adoption effective October 29, 2026
• 43 TAC: 215.133, 215.138, 215.140, 215.141, 215.144, 215.148, 215.150, 215.158, 215.250, 217.74
• Texas statutes: Transportation Code 503, 728; Occupations Code 2301; Finance Code 348, 349; Tax Code 23, 152; Business and Commerce Code 17
• OCCC: examinations, 7 TAC 84.205, 7 TAC 84.708, 2024 rule adoption
• Comptroller: seller-financed sales tax, dealers guide, 34 TAC 3.74
• TCEQ: 30 TAC 114.20
• City of Houston: occupancy inspections, Motor Vehicle Dealer license

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.