Did a Texas motor-vehicle repairer charge customers tax on lump-sum bodywork, painting, rustproofing, or undercoating, and how were decorative painting charges treated?

Plain-English summary

For motor-vehicle repairs billed as one lump sum, the repairer did not bill the customer for sales tax. Instead, the repairer was the ultimate consumer of the materials and paid tax to its suppliers.

The letter listed bodywork, regular painting, rustproofing, and undercoating as examples of vehicle repairs. By contrast, painting murals, pinstriping, or signs on a vehicle required collecting tax on the total charge.

What this means for you

The historical letter distinguished repair work from decorative vehicle painting. How the work was characterized—and, for repairs, the lump-sum billing described—determined whether tax was collected from the customer or paid on materials by the repairer.

Common questions

Did the repairer collect tax on a lump-sum vehicle repair? No.

Who paid tax on the repair materials? The repairer paid its suppliers.

Were rustproofing and undercoating treated as repairs? Yes.

Were murals, pinstriping, and signs taxable? Yes, on the total charge.

Citations and references

• No statute or rule number is cited in the ruling text.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8710L0843D08

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller October 27, 1987

Dear **:

Thank you for your recent letter concerning your sales and use tax
responsibilities.

If you are repairing a motor vehicle for one lump-sum charge, you should
not bill your customer for the tax. As a repairman, you are the ultimate
consumer of materials and should pay tax to your suppliers. Some
examples
of repairs to motor vehicles include: body work, regular painting, rust
proofing, and undercoating.

However, if you paint murals, pinstriping, or signs on motor vehicles,
you should collect tax on the total charge.

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 me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Policy Division.

Sincerely,
Adina Whittemore
Tax Policy Division