Tax Assessor Collector
Ruben P. Gonzalez
Texas Deparment of Motor Vehicles
Texas Department of Public Safety
El Paso Central Appraisal District
City of El Paso
Texas Comptroller of Public Accounts
Delinquent Tax/Collectors Firm
Export Only Rule
16 TAC §111.18
Effective : March 7, 2002
On January 17, 2002, The Texas Motor Vehicle Board passed a rule designed to gibe the MVD one more tool to attack curbstoning. The rule is known as the Foreign Dealer Rule and is directed at those foreign dealers who buy vehicles here in Texas on the pretext of exporting to Mexico and other countries, but those Texas dealers along with a group of Tax Assessor-Collector along the border proposed the procedure to the MVD staff who then wrote the rule and presented it to the Texas Motor Vehicle Board. While the rule was aimed at the illegal Mexican dealer, the rule was worded to apply to sales to any person claiming to buy vehicles for exporting.
The rule requires auctions and dealers to do two things:
Frequently Asked Questions to the Rule
“How do I verify that the buyer is a legal dealer?”
All dealers are presently required to verify that they are dealing with legitimate licensed dealers anytime they sell vehicles on a wholesale basis. If the buyer tells you he is a dealer in Mexico, the seller should ask to see his Mexican dealer license and make a copy of that license of his file.
“What if they do not have a copy of their license with them? Can I still sell to them?”
A call to the office of the Secretaria de Economia in Mexico may be made to verify that a license has been issued to a particular person. The call should be placed to the regional office who issued the license. The selling dealer should then make a note of the foreign dealer's name, license #, date of expiration, physical location of licensee, name of person spoken to and date the call. This note along with identification documents will satisfy the rules requirements. A list of those regional offices may be obtained by the county TAC office personnel.
“What is acceptable verification that the buyer is a legal dealer? Verification for an agent of a legal dealer?”
Acceptable identification documents would include, but are not limited to Mexican driver's license, Mexican voter registration, card, passport, or other official identification cards, if the card contains a picture of the person and lists a physical address in the foreign home country. An agent of a valid dealer should have a letter from the licensed dealer, introducing and verifying the person is his agent. Also, a copy of the license is still required. The buyer's agent should also be able to present the same personal identification. All verification documents for either the dealer or the dealer's agent should be copied and placed in the sales file.
“How and Where do I stamp the title?”
The title stamp is the most important aspect of this rule. Any auction or dealer who sells to foreign dealers should have rubber stamp made, no less than 2 inches wide that contains the words 'FOR EXPORT ONLY" and contains the selling dealer's or selling auto auction's General Distinguishing Number. A sample would look like this:
FOR EXPORT ONLY
The title must be stamped in each and every blank reassignment of the back of the title and on the front of the title in a manner that does not block or obscure any of the writing on the front of the title.
“What is the purpose of the stamp?”
The purpose of the stamp is to be able to identify and mark those vehicles that may no longer be sold legally in Texas. If the foreign dealer is legitimate, he will take the vehicles and the titles back to his home county and when the vehicles are sold there, they will be titled or registered in that country and the Texas title will not be seen again. However, if the vehicle is offered for sale on this side of the border, the stamp will alert the consumer as a possible problem with deal. If the consumer still buys the vehicle and attempts to title the document, the stamp will alert the Tax Assessor-Collector that the vehicle was sold illegally here will forward the title to this office. At that time MVD will contact the selling dealer to obtain the identity of the illegal buyer. This buyer's name will go into a database that will be shared with other dealers, auctions, and other state so that buyer will find it very difficult to buy vehicles here again.
“What if I sell a single vehicle to a resident of a foreign country, not a dealer? Do I still stamp the title?”
Any time you sell a vehicle retail, you know whether or not you are going to collect sales tax from that buyer. If the buyer tells you he doesn't pay sales tax because he is taking the vehicle out of the state or country, you will need to have the consumer fill out and sign the Sales Tax Exemption For Motor Vehicles Taken Out of State. If they say they are taking the vehicle out the country, then you should also stamp the title. Getting a good picture ID of the buyer will tell you what their residence address is. A copy of that ID and the from potential fines for aiding and abetting unlicensed sales if that buyer sells the vehicles on this side of the border. The stamp does not affect the legitimate retail buyer who will title and register their vehicle in their home country. This is the only way we can make a serous dent in curbstoning.
“Will I be fined if I forget to stamp the title or verify a dealer?”
The purpose of the rule is to help eliminate curbstoners, not collect penalties on dealers who are unaware. The first time we catch a dealer not obtaining proper verification or not stamping a vehicle he knows is going out of the country, he will receive a warning letter. However, second time the dealer is caught, the dealer will be liable for a fine for aiding and abetting unlicensed sales. Dealers are liable for this penalty right now without this rule. If the same people come in every week or every other week to buy vehicles for cash then they are obviously suspect as dealers.
“Does this rule apply to salvage vehicles?”
If the vehicle is sold on a blue title, it needs to be stamped. A motor vehicle dealer should not be selling salvage unless they have a salvage license. Auctions and dealers who sell salvage to parties going out of the country may, but are not required, to stamp the salvage titles and salvage certificates at this time.
“What if I stamp the title by mistake? What do I do with the title then?”
First of all, you should ask for the identification of the buyer and make sure the buyer has assured you they are taking the vehicles out of the state before you do any stamping. If you should stamp a title by mistake, then you must obtain a CCO before passing that title.