Ezel / Tax Rulings / TX
TX 8909L0995F09 Motor Vehicle Tax 1989-09-18

How did Texas tax installation and repair of refrigeration units on trucks and trailers?

Short answer: Sale and installation of a vehicle refrigeration unit were taxable. Repair labor on a truck- or trailer-mounted unit was not; in lump-sum repairs the shop paid tax on parts, while with separately billed parts and labor it bought parts for resale and collected tax on the parts.

Apply this to your situation

This page answers the general question as of 1989. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1989
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 1989 Texas Tax Correspondence letter on refrigeration units mounted on trucks and trailers. It predates modern Private Letter Ruling reliance terms and cannot bind the Comptroller for unrelated taxpayers. Rules 3.290 and 3.292, accessory installation, repair labor, parts, lump-sum and separated billing, and treatment of freestanding or building units may have changed. The enclosed rules are not reproduced in STAR. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice.
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

Sale and installation labor for a refrigeration unit added to a motor vehicle were taxable. Repair labor on a truck- or trailer-mounted unit was not taxable as motor vehicle repair.

For a lump-sum repair, the shop paid supplier tax on parts and did not charge the customer tax. With parts and labor separately billed, it bought parts for resale and collected tax on the parts. Repair of similar freestanding or building units was fully taxable.

What this means for you

The unit's mounting and the invoice structure controlled the historical result. Verify current rules.

Common questions

Q: Was mounted-unit repair labor taxable?

A: No. Sale and installation of the accessory were taxable.

Citations and references

  • Rules 3.290 and 3.292 — cited for vehicle and tangible-property repairs.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

September 18, 1989

Dear ***:

Thank you for your letter concerning the sale, installation and
repair of refrigeration units mounted on trucks and trailers.

Charges for the sale and labor to install an accessory to a motor
vehicle, such as a refrigeration unit is subject to sales tax.

Labor charges to repair a truck or trailer mounted refrigeration
unit are not taxable as it is considered the repair of a motor
vehicle. If you repair the unit for a single charge, parts and
labor, you are considered a lump-sum repairman and should pay tax
to your supplier on the parts. You would not charge tax to your
customer. If you bill your customer separately for parts and labor
you may purchase the parts tax free for resale and then
collect tax only on the part charges.

If you repair similar free standing units or units built into
commercial buildings the total charge is taxable, parts and la-
bor.

I have enclosed state sales tax Rule, 3.290, Automotive Repair and
Maintenance Shops, and Rule 3.292, Repair, Remodeling, Maintenance
and Restoration of Tangible Personal Property. These rules will
provide additional information.

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

If you have any questions or need more information, please call
our toll-free number 1-800-531-5441. The regular number is
512/463-4684. You may write me at the Tax Correspondence Divi-
sion.

Sincerely,
Curt Swenson
Tax Correspondence Division

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