Repair Services and Parts

Repair materials and repair paint become part of the vehicle or are consumed in providing the vehicle repair services. This does not include repair parts.

Examples of repair materials include:

• Abrasives
• Chamois
• Lubricants
• Waxes

Examples of repair paint include:

• Body paint
• Paint thinner
• Clear coat
• Primer
   

If you purchase repair materials and repair paint exempt for resale, you must charge sales tax to your customer when you use them. If you pay sales tax on the purchase of materials and repair paint, do not charge sales tax to your customer. You must use a consistent method throughout your business.

For more information, see the Motor Vehicle Repair Industry Guide.

Applying paint sealer is not a taxable service unless it is part of the initial sale of a vehicle. Paint sealer is exempt only when it is applied as part of the original sale of the motor vehicle.

Auto body and automotive repair labor is not taxable when it is separately stated from repair parts on the invoice. Repair labor restores an item to its original condition so it can be used for its original purpose.

Parts used to repair or service a vehicle are taxable to the customer. Parts are easily assigned to a repair or service and have a fixed or definite price.

Do not pay sales or use tax when you purchase these parts to use in your business. Instead, give your supplier a completed Form ST3, Certificate of Exemption. Specify the Resale exemption.

Examples include:

• Alternators
• Belts
• Catalytic converters
• Cylinder head gaskets
• Fuel pumps
• Ignition coils
• Oxygen sensors
• Piston rings
• Spark plugs
• Tires

A core charge is a deposit for a repair part charged at the time of purchase. The core charge is part of the taxable sales price when the part is subject to sales tax.

When the old part is returned, the core charge and the sales tax collected on the charge are refunded to the customer.

You must pay sales or use tax when you purchase shop supplies used to clean or maintain the shop, equipment, and tools. Common examples include “floor dry” products, cleaning products, and rags – though cleaning products and rags may be exempt if they are used up while making repairs.

For more information, see Motor Vehicle Repair.  

If you subcontract with another business for repair work or services, do not pay sales or use tax on your purchase. Instead, give the subcontractor a completed Form ST3, Certificate of Exemption. Specify the Resale exemption. You must charge sales tax to your customer for any taxable subcontracted labor, parts, or materials. Charges for repair labor are not taxable.

Labor to add or install something new or different to a vehicle is taxable. The installed parts are also taxable to the customer. Examples include:

• Installing remote starters, navigation systems, and sunroofs
• Installing bug deflectors and running boards
• Upgrading a sound system
• Installing customized vehicle accessories; such as adding dual exhaust, adding fuel injector control chips, etc.
• Adding power locks, remote starters, cruise control, or window defrosters
• Installing a remote car starter or theft alarms