AirCheckTexas Program

The AirCheckTexas program, administered by participating counties and Councils of Governments, provides vehicle replacement grants and vehicle repair assistance to low-income individuals with polluting vehicles. The program is codified in Health and Safety Code Chapter 382, Clean Air Act.

Vehicle Replacement Program

The maximum grant amount is $3,500. The law excludes the amount of the grant from total consideration paid for a motor vehicle. This means the grant amount is not subject to motor vehicle sales tax.

Vehicle Repair Assistance Program

Sales tax is due on parts used to repair qualifying motor vehicles, even under the AirCheckTexas program.

But, if the counties participating in this program pay the service provider directly for repair parts, no sales tax is due on the parts paid for with county funds.

Payments received from the county should be applied to taxable parts first. Tax is due on taxable repair parts above the amount of the county payment. For example, a car repair bill totals $1250. The taxable parts on the separated bill total $750 and the non-taxable labor totals $500. The county pays $600 directly to the service provider who applies the payment to taxable parts first, reducing the balance due on the parts portion of the bill to $150. The vehicle owner will owe tax on the remaining $150 for taxable parts when settling the account in addition to the labor cost. Exemption certificates are not required.

Questions concerning the program should be directed to the Texas Commission on Environment Quality.

*Originally published in Tax Policy News; a monthly newsletter about Texas tax policy at http://window.state.tx.us/taxinfo/taxpnw/tpn2012/tpn1209.html