TX 9004001L Motor Vehicle Tax 1990-04-24

How did Texas tax heating and air-conditioning repairs to residential and nonresidential mobile homes, RVs, and office trailers?

Short answer: Residential mobile-home repair labor was exempt but materials were taxable; nonresidential mobile-home repairs were fully taxable. RV and office-trailer repair labor was exempt, while the contract form determined whether tax on parts was paid by the repairer or collected from the customer.

Apply this to your situation

This page answers the general question as of 1990. Ezel answers yours, under current Texas tax law, with citations.

Disclaimer: This is an official Texas Comptroller letter issued on the specific facts presented. It dates from 1990, predates modern Private Letter Ruling reliance terms, and cannot be treated by unrelated taxpayers as binding protection. STAR's index title mentions an October 1, 1993 effective date, but the ruling body does not; this page therefore summarizes only the body. Verify current repair-tax rules before relying on this historical guidance.

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 divided heating and air-conditioning repair work according to the property being repaired and, in some cases, the type of contract.

For residential mobile homes, repair labor was exempt but materials were taxable. Under a lump-sum contract, the repairer paid tax to suppliers on incorporated materials and did not charge the customer tax on the lump-sum repair price. Under a separated contract, the repairer could buy the incorporated parts and materials for resale and collect tax from the customer on those items.

For nonresidential mobile homes, the entire repair charge was taxable whether the contract separately stated labor and materials or not.

For recreational vehicles and office trailers, the Comptroller treated the property as motor vehicles. Repair labor was not taxable. Whether the repairer paid tax when purchasing incorporated parts or collected it from the customer depended on whether the contract was lump-sum or separated.

What this means for you

Mobile-home repair businesses

The home's residential or nonresidential classification changed the result. The contract format then controlled the handling of parts and materials for residential repairs.

RV and office-trailer repair shops

The letter applied motor vehicle repair treatment to both categories: labor was exempt, with the parts-tax mechanics driven by contract type.

Tax professionals

The STAR index title contains an effective-date statement absent from the actual ruling. The operative body supports only the repair classifications and contract treatment summarized here.

Common questions

Q: Was labor to repair a residential mobile home taxable?

A: No. The letter treated the labor as exempt, while materials remained taxable.

Q: Was a nonresidential mobile-home repair taxable?

A: Yes. The total charge was taxable whether separately stated or not.

Q: How were office trailers classified?

A: As motor vehicles, taxed for repair purposes like recreational motor homes.

Citations and references

Rule 3.291
Rule 3.357
Rule 3.290

Source

STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
Opinion: https://star.comptroller.texas.gov/view/9004001L

Original ruling text

This document is also indexed as a sales tax document STAR 9004L1019G12.

April 24, 1990

Dear ****:

Thank you for your recent letter regarding the taxability of repairs to

the heating and air conditioning systems of mobile homes and recreational

vehicles.

Mobile homes can be classified as either residential or non-residential

property. Materials are taxable for either type; however, the labor to repair

residential property is exempt and it is taxable for non-residential property.

Under a lump-sum repair to residential mobile homes, tax must be paid to

your suppliers at the time of purchase on all materials, supplies, equipment

used, and parts that are incorporated into the property being repaired. You

will not charge tax to your customer on any portion of the lump-sum charge to

repair residential property. Under a separated contract, the parts and

materials incorporated into the property being repaired may be purchased tax

free by issuing a properly completed resale certificate to the supplier; tax is

collected from the customer on these items. See Rule 3.291 on contractors.

The type of contract will not affect the taxability of non-residential

mobile home repairs. The total charge is taxable whether separately stated or

not. See Rule 3.357 on real property repairs.

Recreational vehicles (motor homes) are motor vehicles for tax purposes.

The labor to repair a motor vehicle is not taxable. The type of contract

(lump-sum or separated) will determine whether tax is paid at the time of

purchase or collected from the customer on parts incorporated into the vehicle.

See Rule 3.290 on automotive repair. During our telephone conversation you

mentioned that you may work on an office trailer. Office trailers are

considered motor vehicles for tax purposes and are taxed like the motor homes.

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 additional information, you may call me

toll free at 1-800-252-5555, extension 5-0330. The regular number is

512/463-4600, or write me at Tax Correspondence, Comptroller of Public

Accounts.

Sincerely,

Bettie U. Peterson

Tax Correspondence Division

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