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Last Updated: 2/23/2017

Handling Sales Tax on Repair Paint and Repair Materials

You must handle sales tax for repair paint and repair materials using one of the three methods listed below. You must remain consistent in the method you choose.
 

Method 1

Treat the repair paint and repair materials as taxable parts

Separately state the price and quantity of the repair paint and repair materials on the invoice and charge sales tax on that amount. Examples are shown below.

​Auto body repair (Method 1)

Motor vehicle repair (Method 1)

 

Method 2

Use an industry-standard formula to calculate the price of taxable repair paint and materials

Multiply the number of labor hours by a rate based on standard practices in your industry. The sales price of the repair paint and repair materials must equal or exceed the price you paid for them. State the repair paint and repair materials as a single line item on the invoice and charge sales tax on that amount. Examples are shown below.

Auto body repair (Method 2)

Motor vehicle repair (Method 2)

 

Method 3

Pay tax on all purchases of materials (does not apply to parts)

Pay sales or use tax on your purchase of repair paint and repair materials. State the paint and materials as a single line item on the invoice and do not charge tax on that amount.

< Repair Paint and Materials Nontaxable Sales >
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