Ezel / Tax Rulings / TX
TX 8809L0897C02 Sales and/or Use Tax (State,Local,MTA) 1988-09-20

Is the labor to install parts like batteries, shocks, and mufflers during a motor vehicle repair subject to Texas sales tax?

Short answer: No, under the rule change described in this September 1988 policy letter. The Deputy Comptroller said batteries, shock absorbers, mufflers, and similar items sold as part of an automobile repair, together with the labor to install them, would be treated as motor-vehicle repair, so the installation labor would not be subject to sales tax. Staff had been instructed to file amended rules in emergency form, but the letter says the final language was still being drafted and approved.

Apply this to your situation

This page answers the general question as of 1988. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1988
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. This letter is Comptroller correspondence addressed to a named state senator about a policy change, not a redacted private-taxpayer ruling. 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

This is a September 20, 1988 letter from Deputy Comptroller Dan Pearson to State Senator Frank M. Tejeda — Comptroller correspondence about a policy change rather than a private ruling to a taxpayer. It responds to the senator's concern about confusion over how sales tax applied to labor on auto repairs.

The Deputy Comptroller announced that, going forward, items sold as part of repairing an automobile — batteries, shock absorbers, mufflers, and similar parts — together with the labor to install them, will be considered repair of a motor vehicle. Because it is treated as motor vehicle repair, the installation labor will not be subject to sales tax. This resolved a problem that had arisen from broadening the sales tax base.

The Comptroller directed its staff to file the amended rules in emergency form to expedite the change, with the final language to be circulated to the industry once drafted and approved. The letter does not identify the final rule number or state the tax treatment of the parts themselves.

What this means for you

Auto repair shops

Under the change described in this letter, labor to install batteries, shocks, mufflers, and similar parts as part of a motor-vehicle repair would be treated as nontaxable repair labor. The letter addresses the labor only; it does not say whether the parts themselves were taxable.

Why this letter matters

It documents a deliberate Comptroller policy shift that the agency intended to implement by filing amended rules in emergency form. It is a statement of the agency's direction, not a ruling on one taxpayer's specific transaction.

Common questions

Q: Is the labor to install a car battery, shock absorber, or muffler taxable in Texas?
A: No. When these items are installed as part of repairing a motor vehicle, the installation labor is treated as motor vehicle repair and is not subject to sales tax.

Q: Does this letter say whether the installed parts themselves were taxable?
A: No. It says the installation labor would not be subject to sales tax, but it does not state the tax treatment of the parts themselves.

Q: Was this a ruling for one taxpayer?
A: No. It is a policy letter from the Deputy Comptroller to a state senator announcing an intended rule change and directing staff to file amended rules in emergency form.

Q: Can I rely on this 1988 letter today?
A: Treat it as historical guidance. It announced a policy change that staff had been instructed to implement through an emergency rule filing; the current rules govern, and this correspondence may no longer reflect present policy.

Citations and references

Rules: The letter says staff had been instructed to file amendments to the Comptroller's existing motor-vehicle-repair rules in emergency form, but it does not cite a specific rule or Tax Code section by number.

Source

Original ruling text

September 20, 1988

The Honorable Frank M. Tejeda
State Senator

Dear Senator:

John Moore discussed with me the phone conversation that you and he had last
week concerning confusion over the tax law as it relates to labor on auto
repairs. As Mr. Bullock's chairman of the Tax Policy Committee, I have met with
our staff and taken appropriate action through amendment of our existing rules
to address the problem you pointed out.

Briefly, Senator, what this reflects is an example of some of the problems
encountered in broadening the base for sales tax. Rest assured that in the
future items sold as a part of the repair of an automobile, i.e., batteries,
shock absorbers, mufflers, etc., as well as the labor to install them, will be
considered repair of a motor vehicle and, therefore, the labor will not be
subject to the sales tax.

I have instructed our staff to file the amended rules in emergency form to
expedite these changes. As soon as the final language is drafted and approved,
Tom Soto, of our Tax Correspondence Group, will provide you and the industry
this information.

If you have any further questions or if I can be of further assistance to you,
please do not hesitate to call.

Sincerely,

Dan Pearson
Deputy Comptroller

cc: Capitol Office
John Moore, Deputy Comptroller
Tom Soto, Tax Correspondence

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