Can a business renting out mobile office trailers use a resale certificate instead of paying sales tax on repair parts and repair labor for that rental inventory?

Subject

Repair Of Retailer'S Own Rental Inventory By The Retailer / Tpp Held For Rental/Sale — Constitutes Processing

Plain-English summary

A business wrote to the Comptroller asking how Texas sales and use tax applies to repair parts for mobile office trailers that it holds for rental.

The Comptroller's answer is short and direct: a resale certificate may be issued to vendors instead of paying tax on repair or replacement parts bought for placement on mobile office trailers held for rental. The same approach works if someone else does the repair work: the business may issue a resale certificate to the repair person instead of paying tax on the repair bill when hiring that person to perform the repair.

As with other letters of this kind, the Comptroller notes the answer is based on the facts presented, and different facts -- even if similar -- could produce a different answer.

What this means for you

Businesses that rent out mobile office trailers (or similar rental inventory)

If you hold mobile office trailers for rental and need to buy repair or replacement parts for them, you can give your vendor a resale certificate instead of paying sales tax on those parts. If you hire someone else to do the repair, you can give that repair person a resale certificate instead of paying tax on their bill.

Accountants and tax professionals

This letter is a narrow, facts-based answer about repair parts and repair labor for a retailer's own rental inventory. It does not lay out the broader legal reasoning (for example, no statutes or rules are cited in the letter itself), so treat it as confirming the resale-certificate mechanic for this specific fact pattern rather than as a full explanation of the underlying law.

Common questions

Q: Do I have to pay sales tax on repair parts for trailers I hold for rental?
A: No. You may issue a resale certificate to the vendor instead of paying tax on those repair or replacement parts.

Q: What if I hire someone else to do the repair instead of doing it myself?
A: You may issue a resale certificate to that repair person instead of paying tax on the repair bill.

Q: Does this apply to any kind of rental inventory, or just mobile office trailers?
A: The letter only addresses mobile office trailers held for rental. The Comptroller notes the answer is based on the facts presented, and different facts could lead to a different result.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9607323L

Original ruling text

July 12, 1996

**.

Dear **:

Thank you for your letter dated July 9, 1996 concerning Texas sales and use tax
as it applies to repair parts for mobile office trailers that are held for
rental purposes.

A resale certificate may be issued to vendors in lieu of paying the tax on
repair/replacement parts purchased for placement on mobile office trailers that
are held for rental purposes. You may also issue a resale certificate to a
repair person in lieu of paying the tax on a repair bill when you hire someone
to perform the repair for you.

This opinion is based on the facts presented. Different facts although
similar, may result in different answers.

If you have any questions or need more information, you may call me toll free
at 1-800-531-5441, ext. 5-0330. The direct line is 512/475-0330. You may also
write to Tax Policy, Comptroller of Public Accounts.

Sincerely,
Bettie Peterson
Tax Policy Division