Which truck and trailer repair, accessory-installation, remodeling, and freight charges were taxable under this 1984 Texas guidance?

Plain-English summary

Ordinary repair labor on trucks and trailers registered for highway use was not taxable, while remodeling, bundled installation labor, and certain freight charges were taxable.

Separately stated labor for installing accessories was not taxed. If installation was included in the accessory's sales price, tax applied to the total. Labor also became taxable remodeling when accessories substantially changed a trailer's cargo type or capacity, or altered a truck or changed its body style.

The letter treated a vehicle designed for highway registration but not actually registered the same as a registered vehicle. Freight was taxable if transportation occurred before title or possession transferred.

What this means for you

Separate labor on invoices, distinguish repair from remodeling, document when title or possession passes, and verify whether current law still follows these 1984 classifications.

Common questions

Q: Was ordinary truck or trailer repair labor taxable?
A: No under this letter.

Q: Was separately stated accessory-installation labor taxable?
A: No, unless the work was remodeling.

Q: When was freight taxable?
A: When transportation occurred before title or possession transferred.

Citations and references

The letter cites no numbered statute or rule. It distinguishes repair, accessory installation, remodeling, and transportation charges under the 1984 services-tax changes.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/8409L0586C12

Original ruling text

September 11, 1984

Dear *****:

Thank you for your letter asking how your operation will be affected
by the new tax on services.

The new provisions in the law which make repair, maintenance and
restoration of tangible personal property a taxable service do not
apply to motor vehicles. For the most part your business will not
be affected if you work primarily on trucks and trailers. Specific
answers to your questions are as follows:

1. Repair labor on trailers registered for highway use is not taxable.

2. Separately stated labor for installing accessories to trailers
   registered for highway use is not taxable. However, if installation
   labor is included in the sales price of the accessory sold, sales tax
   will apply to the total amount charged if not separately stated. Also,
   if the accessories added substantially alter the trailer so that it is
   a different type of trailer which can carry a different type or amount
   of cargo, then the labor is considered remodeling. Remodeling labor
   is taxable whether separately stated or not.

3. Tax is not due on repair labor on trucks registered for highway use.

4. Tax is not due on separately stated labor for installing accessories
   to trucks. If the price quoted for the sales price of an accessory
   includes the amount for installation, however, or if the installation
   of the accessories alters the truck or changes the body style, the labor
   is taxed.

5.You may treat a motor vehicle that is designed to be registered for
highway use but is not the same as one that is.

6. Freight charges will be subject to tax if the transportation occurs
   prior to the transfer of title or possession.

This opinion is based on the facts presented. If there are additional
or different facts, the opinion may change.

Please feel free to contact me if you have additional questions. You
may write me or call toll-free 1-800-252-5555 from anywhere in Texas.

Sincerely yours,

Tom Soto
Tax Policy Section
Tax Administration Division