[damdfw]

It's not a loophole. One of the employees at my local license office was very familiar with the law and you can look up the Texas law for yourself online.

The law states: (Example is a truck being built)

The taxpayer pays Limited sales and use tax on each part or accessory ordered to build a motor vehicle. No motor vehicle tax is due when the taxpayer (builder) initially titles the truck.

NOTE: The only time motor vehicle tax is not due on a homemade motor vehicle is when the vehicle is initially titled by the person who actually built it. Once a vehicle has been titled or registered by the person who built it, motor vehicle tax is due on all subsequent sales.


It goes on to say if you custom order a car to be built then you do pay tax because you are not the builder.

When I registered my car, I provided the green sheet (inspection), a copy of the receipts for the rolling chassis, engine, transmission and the original MSO. I then wrote a check for $105.30.