Texas dealers sue over used-car fee

A Texas law that requires anyone who brings a used vehicle from another state to pay $225 for title and registration is being challenged in court.

Autoplex Automotive, a new-car dealership in Amarillo, and H.M. Dodd Co. Inc., a used-car dealership in Gilmer, filed a complaint in the District Court of Travis County on Aug. 15 asking that the law be declared unconstitutional. The law is to go into effect on Sept. 1. But the state will not start collecting the fee until Nov. 1 to give the Texas Department of Safety time to put a fee-collection system in place.

The law is intended to raise $105.7 million annually for the state Emission Reduction Plan, which provides grants to Texas businesses that agree to retrofit and replace diesel engines or install special equipment to reduce pollution.

The Texas attorney general’s office is reviewing the lawsuit, spokesman Tom Kelley said.

Michael Dunagan, one of the attorneys representing the dealerships, said the law will have a major financial impact on dealers, auctions, fleet/lease companies and anyone else who buys and sells used vehicles.

You can reach Arlena Sawyers at asawyers@crain.com

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