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What You Need to Know About Starting Your New Dealership

Motor Vehicle Inventory Tax Statement (VIT) and Inventory Declaration (Declaration):

Within 30 days of the active date of your license, (not when you open for business or start selling vehicles), notify both the county tax office and appraisal district where the dealership is located that you are a new dealer and request to setup an account.

  • VIT: A VIT reports information on vehicles sold in the previous month. File these at both the county tax office and appraisal district. Regardless if no sales are made, you must still file the form reporting zero sales. If filed late, penalties may be assessed. (Most often due on the 10th day of each month, check with your county for details.)
  • Declaration: A Declaration reports the total number of sales made during previous year. File these at both the county tax office and appraisal district. Regardless if no sales are made, you must still file the form reporting zero sales. If filed late, penalties may be assessed. (Due between January 1 - February 1 of each year.
Financing Sales:

If you intend to provide in-house or third party motor vehicle financing sales, contact the Office of Consumer Credit Commission at 512-936-7600, toll free at (800) 538-1579 or at www.occc.state.tx.us to obtain the required sales finance license.

Vehicle Sales to Retail Purchasers:

Once a vehicle is sold, you have 20 business days for cash sales and 3rd party financed sales (or 45 calendar days for in-house financed sales) to file the appropriate paperwork with the county tax office. This process includes transferring title of the vehicle to the retail purchaser, paying vehicle registration fees [registering the vehicle on behalf of the customer], and paying sales taxes. If you need help with this process, contact the TxDMV Customer Service at (888) 368-4689, or your local county tax office.

Minimum Vehicles Sales:

You must remain regularly and actively engaged in business by selling or assigning at least 5 vehicles in a calendar year or the license may be revoked or canceled.

eTAG:

Once licensed, you should receive two separate emails providing you with a user name and password to access the eTAG System.

The eTAG System website address is https://webdealer.txdmv.gov/title/login.do

This mandatory program allows you to issue temporary registration tags for every motor vehicle, motorcycle, motor scooter, travel trailer and trailer/semitrailer you sell.

  • If you have problems with the eTAG System, call (512) 465-4010.
  • If you have any questions regarding the creation of an eTAG account or rules for their use, please call (888) 368-4689 or email This email address is being protected from spambots. You need JavaScript enabled to view it.
Changing License Information:

You are required to ensure the information on your license record is current. Common changes are:

  • Contact information changes, such as mailing address, phone number, or email
  • Moving: adding or closing locations
  • Business changes, such as ownership, management, business name or DBA changes

Log on and choose either “Amend a License” or “Change General License Info” to update your information directly within the eLICENSING system.

Cancel License:

If you close your business, you must log on to eLICENSING and choose "Close a License." Do not assume the license will close after it expires. All plates, temporary tags, stickers, and plate receipts must be returned to the Texas Department of Motor Vehicles within 10 days of license closure.

Optional Services:

Motor Vehicle Inquiry Account Information (MVInet):

If you wish to view vehicle title and registration information, you may sign up for an MVInet subscription (formerly known as TWIX). For more information, call (512) 465-1468, go to https://mvinet.txdmv.gov, or email This email address is being protected from spambots. You need JavaScript enabled to view it.

Dealer Training Seminars:

You are encouraged to attend any of our free Dealer Training Seminars that cover valuable information about the statutes and rules that govern this industry. You will need to register on the TxDMV website under Dealer Training Seminars in order to attend. When your chosen course location shows “Register,” click the link to register for the event.

Association Websites
Feedback

We are always trying to improve and appreciate your feedback. If you have a suggestion, a complaint or even a compliment, email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

Please make sure to make use of the TxDMV.gov website for dealer updates, rule changes, publications: such as the dealer manual, licensing forms, and schedule of dealer training seminars, and links to the Texas Occupations Code, Texas Transportation Code, and Chapter 215 – Motor Vehicle Distribution Rules.

 

Converter License

converter

A "conversion" means a motor vehicle, other than a motor home, ambulance, or fire-fighting vehicle, that:

  • has been substantially modified by a person other than the manufacturer or distributor of the chassis of the motor vehicle; and
  • has not been the subject of a retail sale.

A "converter" means a person who before the retail sale of a motor vehicle:

  • assembles, installs, or affixes a body, cab, or special equipment to a chassis; or
  • substantially adds, subtracts from, or modifies a previously assembled or manufactured motor vehicle other than a motor home, ambulance, or fire-fighting vehicle.

A "retail sale" is defined as any sale of a motor vehicle other than:

  • a sale in which the purchaser acquires a vehicle for resale; or
  • a sale of a vehicle that is operated under and in accordance with Section 503.061 of the Texas Transportation Code, which allows for the use of metal dealer's license plates.

Neither converters nor their representatives are allowed to sell the new motor vehicles they convert directly to Texas consumers, including municipalities. Only dealers that are franchised and licensed for the underlying line-make of the converted vehicle are allowed to sell converted vehicles to Texas consumers. If a converted new motor vehicle is sold through a bid process, a franchised dealer for the underlying chassis line-make must be listed on the bid as the seller.

The initial sale of the new motor vehicle to a converter is not a retail sale, since the converter purchased the vehicle in order to convert it and then resell it. Thus, even though the converter may title the vehicle in their name, it is still a new motor vehicle.

The converter is not required to purchase the motor vehicle it will convert from a Texas franchised dealer. However, once the conversion is complete, the vehicle can only be sold to the end-user by a franchised and licensed Texas motor vehicle dealer for the underlying chassis line-make. The franchised dealer must invoice the end-user for the entire purchase price of the vehicle, including the conversion package, obtain payment for the entire purchase price, and perform the titling work on the complete vehicle. How the converter is paid for the conversion package and conversion work is between the converter and the franchised dealer.

Substantial modifications performed on vehicles that have already been the subject of a retail sale are considered “after-marketconversions, and are not subject to regulation by Texas Department of Motor Vehicles.

If a person makes substantial modifications to a new motor vehicle and the resulting product is an ambulance, fire-fighting vehicle, or motorhome, as those terms are defined in Chapter 2301 of the Texas Occupations Code, then the person must obtain a manufacturer license, not a converter license. However, if even one of the conversions produced does not meet the exact definition of ambulance, fire-fighting vehicle, or motorhome, then a converter license, as well as a manufacturer license, is required.

Converters are not required to be physically located in Texas. Even if the converter is located in another state, as long as new motor vehicles they convert are sold in Texas, the converter must have a converter license issued by Texas Department of Motor Vehicles.

Independent (GDN) License

independentA GDN is the basic dealer license that allows a person to buy, sell or exchange the type of used vehicle for which the GDN is issued. GDN licenses are divided into several categories. When applying for license, you must select one of the independent license types on the application. If you wish to have multiple types, you may submit multiple applications.

 

Independent Motor Vehicle - May buy, sell, or exchange any type of used cars, trucks, motor homes, and neighborhood vehicles. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on motor vehicles only. Must provide a bond.

Independent Motorcycle - May buy, sell, or exchange any type of used motorcycles, motor scooters or ATVs. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on motorcycles, motor scooters or ATVs only. Must provide a bond.

Travel Trailer - May buy, sell, or exchange used travel trailers. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on travel trailers only. Exempt from the security requirement.

Trailer/Semitrailer - May buy, sell, or exchange new or used utility trailers and/or semitrailers. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on trailers/semitrailers only. Exempt from the security requirement.

Wholesale Dealers - sell or exchange vehicles only with other licensed dealers. Are NOT required to have a five-vehicle display area. May NOT sell vehicles to retail purchasers. Wholesale vehicle dealers may buy, sell, or exchange used vehicles, including motor vehicles, motorcycles, and travel trailers. May buy, sell, or exchange new or used trailers and/or semitrailers. May use temporary tags and metal dealer license plates. Must provide a bond.

Wholesale Motor Vehicle Auction - May offer vehicles for sale by bid only to licensed dealers at a bona fide auction at a permanent location. Must provide a bond. May not make facilities or GDN available to any other person for the purpose of the sale or auction of vehicles. May be issued only one wholesale motor vehicle auction GDN for a particular location. May be issued a regular motor vehicle GDN for a location that has been issued a wholesale motor vehicle auction GDN.

Independent Mobility Motor Vehicle Dealer License - allows a dealer to offer to sell new mobility motor vehicles. A "mobility motor vehicle" is a motor vehicle designed and equipped to transport a person with a disability.

Franchise License

franchise

You need both a Franchise License and a General Distinguishing Number (GDN or P-number) to buy, sell, service, or exchange new motor vehicles, motorcycles, or towable RVs (including travel trailers, but not including utility trailers/semitrailers).

Franchised dealers operate under agreements with manufacturers or distributors to sell new vehicles.

A franchise dealer license is issued to a specific person or business entity for a specific showroom (location). This license is not transferrable to another person or another business entity.

A separate franchise license is required for each separate showroom.

Multiple vehicle line-makes may be sold in the same showroom, so long as each line-make is listed on the franchise license.

You may operate multiple franchise showrooms (new vehicle sales) within the same city limits with a single GDN. However, each franchise showroom location is licensed separately. The dealer may use one GDN license number for all subsequent applications.

Service-only Facilities:
  • A service-only facility is a location occupied and operated by a franchised dealer that is a completely separate, non-contiguous site, from the franchised dealer's new vehicle sales and service or sales only location, where the franchised dealer will perform warranty and non-warranty repair services.
  • TxDMV does not license a facility that performs only non-warranty repairs.
  • Sales of vehicles do not occur at a service-only facility.
  • The facility requires a separate, service-only franchise license. The fee is $200.
  • The dealer may not obtain a service-only facility license to service a particular line-make of new motor vehicles, unless the dealer is also franchised and licensed to sell that line-make.
Leasing Vehicles:
  • In general, dealers may not use the word “lease,” “leasing,” or any variation in their DBA unless they have a lessor or lease facilitator license.
  • The exception to this is a franchised dealer, who may lease a motor vehicle owned by the dealer and of a line-make the dealer is licensed to sell.

Dealerships (except trailer dealers) may be open Saturday or Sunday, but not both.

LF 621 - Evidence of Relocation

LF 131AB - Evidence of Franchise

In-Transit License

transitAn in-transit license is required for a drive-a-way operator who transports and delivers a vehicle in this state from the manufacturer or another point of origin to a location in this state using the vehicle's own power or using the full-mount method, the saddle-mount method, the tow-bar method, or a combination of those methods.

Drive-a-way operators may apply for, receive, and attach metal in-transit license plates to the vehicles they transport.

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