Was tinting a new vehicle and retinting a used vehicle treated the same for California sales tax?

Plain-English summary

California treated tinting the windows of a new vehicle as taxable fabrication because the tinting was a step in producing the finished property for a consumer.

Retinting a used vehicle was different. Because the work restored the windows to their former condition, it was repair work. If the tinting business separately charged for materials, or their retail value exceeded ten percent of the total charge, it was the retailer of those materials. Otherwise it was their consumer. In either case, the business was told to segregate its nontaxable retinting labor.

Common questions

Was new-vehicle tinting repair labor?

No. The source treated it as fabrication.

Was used-vehicle retinting repair labor?

Yes, under the source's assumptions.

When was the retinter a materials retailer?

When materials were separately charged or exceeded ten percent of the total charge.

Citations and references

• California Code of Regulations, title 18, Regulations 1524(b)(3), 1526, and 1546

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/315-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/315-0908.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

315.0908

Date:

From:

John Abbott
Senior Tax Counsel

Subject:

Vehicle window tinting

October 24, 1989

In your August 30, 1989 memo to me, in which the taxpayer is not named, you write: “Per your telephone conversation with --- on August 24, 1989 regarding vehicle window tinting, you said that tinting new windows is taxable, while re-tinting windows is exempt. Since taxpayer questions this, could I please get your response in writing? Thank you.” I assume that if the taxpayer is tinting the windows of a new vehicle, he is performing the tinting for a customer who has purchased the vehicle from a new car dealer. Likewise, I assume that if the taxpayer is re-tinting the windows of a used vehicle, he is doing so for the vehicle owner, not for a dealer for resale. The application of tax to tinting anew vehicle's windows is governed by Regulation 1526. That regulation provides that tax applies to charges for fabricating, processing, etc., tangible property for consumers who furnish the materials used in the fabricating or processing. The tinting operation is a step in the process of producing the finished product and constitutes taxable fabrication labor. See also Regulation 1524(b)(3) for a similar application of tax to charges for painting, polishing, and finishing property in connection with the production of a finished product. Regulation 1546 governs the application of tax to re-tinting the windows of a used vehicle for a consumer. Since re-tinting restores the used vehicle’s windows to their former condition, we view this as a repair operation. The taxpayer makes a separate charge for the materials used, or if the retail value of those materials constitutes more than 10 percent of the total charge, the taxpayer is the retailer of the materials; otherwise, he is the consumer of the materials. In either case, the taxpayer should segregate his nontaxable charges for labor in retinting the windows. JA:jb