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Handling Sales Tax on Repair Paint and Repair Materials

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

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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.

Example charts of how to calculate taxes when making repairs to a motor vehicle (Method 2)

Method 3 [+]

Guide Menu

Handling Sales Tax on Repair Paint and Repair Materials

Treat the Repair Paint and Repair Materials as Taxable Parts

Use an Industry-standard Formula to Calculate the Price of Taxable Repair Paint and Materials

Pay Tax on all Purchases of Materials (Does not Apply to Parts)