Ezel / Tax Rulings / TX
TX 8410L0597D01 Sales and/or Use Tax (State,Local,MTA) 1984-10-31

How did Texas tax TV pickup and delivery, warranty repair parts, and flat-rate manufacturer warranty charges?

Short answer: TV pickup and delivery charges were taxable. Manufacturer-warranty repair parts created no tax liability if properly recorded and bought with an exemption certificate, and a flat-rate charge to the manufacturer for warranty repair was not taxable.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 pickup and delivery charges for a television being repaired were taxable.

Neither the manufacturer nor the repairer incurred tax liability for repair parts used under a manufacturer's warranty. The repairer had to record parts removed from tax-free inventory as warranty-repair use and could give its supplier an exemption certificate when purchasing the parts.

When the repairer fixed a television under the manufacturer's warranty and charged the manufacturer a flat rate, no tax was due on that charge.

What this means for you

Television and electronics repairers

The letter treated transportation charges differently from warranty parts and the flat-rate warranty repair charge.

Businesses managing repair-parts inventory

The nontaxable parts treatment came with a recordkeeping instruction: identify parts removed from tax-free inventory for manufacturer-warranty repairs.

Accountants and tax professionals

Retain the supplier exemption certificate and inventory records supporting warranty use. Verify current warranty and repair-service rules.

Common questions

Q: Were TV pickup and delivery charges taxable?
A: Yes.

Q: Were repair parts used under a manufacturer's warranty taxable to the manufacturer or repairer?
A: No, under the treatment described in the letter.

Q: Could the repairer buy those parts with an exemption certificate?
A: Yes.

Q: Was a flat-rate warranty repair charge billed to the manufacturer taxable?
A: No.

Citations and references

  • The letter cites no statute or administrative rule.

Source

Original ruling text

October 31, 1984

Dear *****:

Thank you for your letter which was mailed to us on October 17, 1984,
concerning the changes in repair labor.

Tax is due on pickup and delivery charges for a TV which is to be
repaired.

Neither the manufacturer nor the repairman incur tax liability for
repair parts used under a manufacturer's warranty. Parts removed from a
tax-free inventory for use in repairs under a manufacturer's warranty
should be recorded in the repairman's books as being used for this
purpose. When purchasing parts, an exemption certificate may be issued
to your supplier in lieu of tax.

When you repair a TV and charge the manufacturer a flat rate, no tax is
due.

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 1-800-252-5555 from anywhere in Texas or
phone 512/475-1931.

Sincerely,

Dot Burchard
Tax Policy Division

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