Sen. Charles Perry presented a proposal to exempt inherited motor vehicle transfers from the state's 6.25% motor‑vehicle tax, saying the current practice effectively taxes surviving spouses when a lien exists on the vehicle.

The bill as described would create a separate category for inherited vehicle transfers and remove them from the motor‑vehicle tax calculation, aligning state practice with federal treatment of marital transfers, Perry said.

Why it matters: County tax assessors told the committee that enforcement of the Comptroller's interpretation has created situations in which grieving family members are unexpectedly charged a tax on the presumed value of a vehicle when a lien remains. Proponents called the change a fairness correction and a simplification for county offices.

What was said

Sen. Perry said the proposal responds to constituent complaints and inconsistent enforcement by the Comptroller’s office. “This is a tax cut bill,” Perry said, adding that the Comptroller’s office supported the concept.

Larry Gaddis, Williamson County tax assessor‑collector and representative of the Tax Assessor‑Collectors Association, testified in support. Gaddis described recent Comptroller guidance that treats a borrower’s outstanding lien as “consideration,” creating a taxable transfer even between spouses. He said county offices now must explain to bereaved family members why they are being charged the tax and described the outcome as “insult to injury” when the tax exceeds the vehicle’s equity.

Comptroller office staff were listed as resource witnesses and the committee indicated the bill will proceed to a committee sub and remain pending for further drafting and fiscal work.

Ending

The committee closed public testimony on the measure and left the bill pending while a committee sub works with the Comptroller’s Office to finalize language and a fiscal note.