 Chances are you drive your car to work. If so, you almost certainly drive it home at the end of the day as well. You might hop in your car for business errands, drive to off-site meetings, pick up clients and colleagues at the airport, hit the road for a conference, or any number of other business-related trips – all in that same automobile. Does that mean you should pay property taxes on your vehicle?
Some people are required to do exactly that. I’m not talking about a vehicle registration fee. We all pay that. But independent contractors and self-employed individuals must also pay property tax on any personal vehicle that they also use in the production of income. They call this a “mixed-use” vehicle. The tax is no trifling amount, either. It can easily set you back $600 a year.
For a time, self-employed people and independent contractors were required to render (that means report) their mixed-use vehicles to the county tax assessor. If you failed to do so, you could have faced a stiff penalty.
In 2005, the Texas Legislature decided this tax was unfair, and they did away with the requirement to render mixed-use vehicles. However, a handful of county tax assessors continued to levy the tax on automobiles that had previously been rendered. They even pursued people who owned automobiles the assessors believed were used for both personal and business travel.
I don’t think the Texas Legislature meant to drop the requirement to render mixed-use vehicles only to have people still be on the hook for the tax. Nevertheless, a Texas attorney general’s opinion stated that an amendment to the Texas Constitution was needed to exempt these vehicles from property taxation. |
That amendment goes before Texas voters in November. It is Proposition 6, and voting for it will abolish this insidious tax.
You may wonder what all this has to do with real estate. I’m glad you asked. A few county tax assessors have gone after real estate agents and other self-employed people to pay this tax on their mixed-use cars. That hasn’t been the case in most parts of Texas, but if Prop 6 fails, it could open the floodgates for tax assessors across the state. Hundreds of thousands of real estate agents, independent insurance agents, landscapers, architects, doctors, cosmetics salespeople, painters, plumbers, handymen, and small-business people will be subject to paying this hefty property tax on their cars.
Perhaps you’re someone who will be affected by this tax. Or maybe your spouse, parent, child, or good friend is. Maybe you change careers at some point in the future and find an unpleasant surprise in an envelope from your tax assessor. Then again, maybe you won’t – you’ll just help pay those tax bills as the costs for all those products and services go up and get passed along to consumers.
You have the power protect yourself and others from this unfair tax. Vote for Prop 6 on November 6. (Early voting goes from October 22 – November 2.) Get other concerned voters to join you, too. If we don’t, we’ll all be paying the bill for a long time to come.
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