Was the total charge taxable for converting a motor vehicle to LG fuel or dual gasoline/LG fuel?

Plain-English summary

The request described bolt-on conversions of new or used motor vehicles. One replaced gasoline carburetion with an LG-fuel system; another added an adapter and switching equipment so the vehicle could use gasoline or LG fuel.

The Comptroller classified all three described situations as remodeling. The letter defined remodeling as changing an item's form, shape, or style without changing its identity or nature: after conversion, the item remained a vehicle but operated on different fuels.

Because the modifications constituted remodeling, the total charge was taxable, including both the parts and the installation.

Common questions

Did the answer treat the work as a nontaxable repair? No; it treated the conversion as remodeling. Did the tax apply only to parts? No. The total charge was taxable. Did dual-fuel capability change the result? No under the described bolt-on arrangement.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8503L0629A02

Original ruling text

March 26, 1985

Dear ***:

Thank you for your recent letter. I have restated your facts below.

(1) If a person purchases a new or used vehicle, and takes that vehicle to a
garage that installs LG systems, are the parts and installation taxable or are
the parts taxable only, and the installation not taxable.

(2) Installation/Conversion to LG Fuel Only - Taxable or Not Taxable:
Step 1. Remove Gasoline Carburetor
Step 2: Replace with LG carburetor (May require an adapter plate between
manifold and carburetor). Also some people may wish to remove intake manifold
and replace with a different intake manifold. This is not a normal procedure.
Step 3: Choke and throttle linkage reconnected to LG carburetor.
Step 4: Air Filter Installed. Fuel line connected.

(3) Installation/Conversion to dual carburetion/gasoline or LG fuel may be used
to propel vehicle.
Step 1: Air Filter removed.
Step 2: LG adapter (metering device) is bolted to top of gasoline carburetor.
Step 3: Switching devices placed in line so type of fuel may be chosen.
Step 4: New air filter installed on top of gasoline carburetor which allows
clearance of LG adapter.
Step 5: LG fuel line connected to carburetor LG adapter.

These steps in both situations 1 & 2 do not require any modification to existing
systems, except to add to or replace existing items. They are no different than
replacing a shock absorber on a motor vehicle with a different type of shock
absorber or installation of a passenger seat in the bed of a pickup truck. These
are strictly bolt on operations of adding an automotive accessory, such as air
conditioner on a car which was not factory equipped with air.

Response: Each of the three situation is remodeling. Remodeling is changing the form,
shape or style of an item without changing its identity or nature. In the facts
presented we still have a vehicle, but one that operates on different fuels.

It is true that a sale and installation has taken place, but in my opinion the
modifications are such as to constitute remodeling. Therefore, the total charge is
taxable.

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

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the Tax
Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division