As of September 1, 2025, the 89th Texas Legislature passed HB 4226 and SB 2064. These two bills add tax exemptions for certain motor vehicle transactions and apply to motor vehicle transfers, sales, uses, or rentals occurring on or after September 1.

Tax liabilities that accrued before the effective date will still be governed by the former law.

HB 4226 exempts the motor vehicle sales, use, and rental tax for the following:

• A motor vehicle purchased, used, or rented by a nonprofit food bank, and used primarily for the purpose of the food bank. A nonprofit food bank defined by Tax Code, Section 162.001(45-a), is a nonprofit entity that solicits, stores, and redistributes edible food to agencies that feed needy families and individuals
• A motor vehicle purchased, used, or rented by certain providers of housing and related services on motor vehicles used primarily to provide housing at locations they own or control. A provider of housing and related services is further described by Tax Code, Section 151.310(a). To qualify for the exemption, the housing provider must serve individuals experiencing homelessness with a disabling condition who have either been continuously homeless for at least one year or have had at least four episodes of homelessness in the past three years.

SB 2064 introduces changes to the taxation of vehicles obtained through a decedent’s estate (inheritance).

• Motor vehicles inherited through a decedent's estate or acquired by a rights of survivorship agreement are exempt from motor vehicle sales tax, which eliminates the $10.00 gift tax previously collected in these instances.

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