Ezel / Tax Rulings / TX
TX 8410L0591B11 Sales and/or Use Tax (State,Local,MTA) 1984-10-05

Were major-appliance repair parts and labor taxable when the manufacturer paid the full warranty-repair cost?

Short answer: No. Repair parts and labor were not taxable when the manufacturer paid the entire cost under its warranty. The repairer had to keep records showing that the parts and services were for manufacturer-warranty repairs.

Apply this to your situation

This page answers the general question as of 1984. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1984
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller said no tax was due on major-appliance repair parts or labor when the manufacturer paid the entire cost under its warranty.

The repairer had to keep records showing that the parts and service charges related to manufacturer-warranty repairs.

The letter says the conclusion was based on Section 151.0101(a)(5) and (b) and Rule 3.292.

What this means for you

Appliance repair businesses

The historical nontaxable treatment depended on full payment by the manufacturer and on warranty-specific records.

Accountants and tax professionals

Retain documentation linking parts and labor to the manufacturer's warranty and verify current versions of the cited provisions.

Common questions

Q: Were warranty repair parts taxable?
A: No, when the manufacturer paid the entire repair cost.

Q: Was warranty repair labor taxable?
A: No, under the same condition.

Q: What records were required?
A: Records identifying the parts and services as manufacturer-warranty repairs.

Citations and references

  • Section 151.0101(a)(5) and (b) (as cited in the letter)
  • Rule 3.292 (as cited in the letter)

Source

Original ruling text

October 5, 1984

Dear ***:

Thank you for your, recent letter requesting clarification of the
application of law as regards labor on major appliance repair for
manufacturer's warranties.

Tax is not due on repair parts or labor charges for repairing a product
under a manufacturer's warranty when the manufacturer pays for the
entire cost of the repairs. The repairman is required to keep records
indicating that the charges for parts and service are for repairs under
a manufacturer's warranty. I used section 151.0101(a)(5) and (b) and
rule 3.292 in forming this opinion.

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

Please feel free to contact me if you have additional questions. You
may write me, call toll free 2-800-252-5555 from anywhere in Texas or
phone 512/475-1931.

Sincerely,

Al Van Allen
Tax Administration Division

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