Vehicle tax scheme in Travis County may have cost the state $1M

Travis County Tax Assessor office

AUSTIN (KXAN) — An audit shows the vehicle title scheme that several Travis County Tax Assessor Collector employees are accused of being involved in may have cost the state approximately $1 million in vehicle sales tax.

In its audit of the Tax Office, the Travis County Auditor’s Office looked at title transactions entered into the Texas Department of Motor Vehicle’s (TxDMV) Registration and Title System (TRS) by Auto Title Services. Auto Title Services (ATS) is a third-party business that has contracted with the Travis County office to perform vehicle registration and titles services. 

The audit showed between Sept. 25, 2015-May 15, 2017, ATS performed 456 even trade transactions; all but seven of the transactions “appear to have been inappropriate or incorrectly recorded for various reasons” such as invalid Vehicle Identification Numbers. In those transactions, $127,500 in vehicle sales payable to the Texas State Comptroller was not collected. According to the audit, ATS “completed an unusually high volume of even trade transaction,” during this time period.

According to the audit, TxDMV had suspended ATS access to the registration system from Dec. 2015 to May 2016. After the six-month suspension, the company came back and completed fewer even-trade transactions. However, it started completing more exempt transactions (e.g. salvage titles) where the buyer does not have to pay motor vehicle taxes. 

From June 2016 to May 2017, anywhere between 700-1,200 transactions related to salvage titles were “handled incorrectly,” resulting in anywhere between $540,000-$927,000 in vehicle sales tax not collected. 

On Monday, the Texas Department of Public Safety said it arrested four Travis County employees and three others in connection with the “really big organized scheme.” 

As authorities continue the investigation, the satellite tax offices in Travis County remain closed until further notice. Only the main office at 5501 Airport Blvd. in Austin is open. People who have business there should expect a 2-4 hour wait. 

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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