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Motor Vehicle Sales Tax

Texas imposes a 6.25 percent motor vehicle sales tax on the sales price (minus any trade-in allowance). Collecting counties retain 5 percent of the revenue, and an additional small portion is allocated to the Property Tax Relief Fund and the Emissions Reduction Plan Account. The remaining portion goes in the General Revenue Fund. Increasing the motor vehicle sales tax rate or dedicating 100 percent of revenue from this tax to the State Highway Fund rather than the General Revenue Fund could be one way to help meet future transportation needs in the state.

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