Could a storage-trailer lessor buy repair parts tax-free for resale when attaching them to rented or leased trailers?

Plain-English summary

Repair parts purchased solely for attachment to storage trailers that would be rented or leased qualified for historical sale-for-resale treatment.

The trailers themselves were classified as motor vehicles and taxed under Chapter 152. The repair parts, however, were taxable items governed by Chapter 151.

Rule 3.285(a) defined a sale for resale to include a taxable item purchased solely for resale, rental, or lease in its purchased condition or as an attachment to another taxable item. The Comptroller said the property receiving the part did not itself have to be taxed under Chapter 151 when later rented or leased.

The letter warned against confusing repair parts with accessories added to motor vehicles under Rule 3.348(b). They were not the same and received different sales-tax treatment.

STAR's subject line also mentions transportation charges, but the body gives no facts or answer about them.

What this means for you

Trailer lessors

The purchase purpose mattered: the parts had to be acquired solely for attachment to property that would be rented or leased.

Repair parts versus accessories

Classification controlled the rule. The letter specifically rejected treating all repair parts as motor-vehicle accessories.

Transportation charges

This document provides no verified transportation-charge rule despite the metadata label.

Common questions

Q: Were storage trailers treated as motor vehicles?
A: Yes, under Chapter 152.

Q: Which chapter governed the parts?
A: Chapter 151.

Q: Did the trailer itself need to be taxed under Chapter 151?
A: No.

Citations and references

• Texas Tax Code ch. 152 — storage trailers as motor vehicles
• Texas Tax Code ch. 151 — sales tax treatment of repair parts
• Texas Comptroller Rule 3.285(a) — sale-for-resale definition
• Texas Comptroller Rule 3.348(b) — accessories added to motor vehicles, distinguished from repair parts

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/8509L0659E12

Original ruling text

September 3, 1985

Dear ***:

Thank you for your letter of August 20, 1985, concerning the taxability
of repair parts purchased by your client to repair storage trailers,
some which are rented and some leased.

The storage trailers are classified as motor vehicles and are taxed
under chapter 152 of the Texas Tax Code.

The repair parts for the trailers are taxed under chapter 151 of the Tax
Code. Section (a) of Rule 3.285 states that a sale for resale is not
taxable and further defines a sale for resale as "a sale of a taxable
item to any purchaser for the sole purpose of reselling, leasing or
renting it ... in the form or condition in which it is purchased or as an
attachment to ... other taxable items". (Emphasis added).

The taxable item to which the repair parts are attached need not be
subject to tax under Chapter 151 when resold, leased or rented.

The confusion about the taxability of repair parts likely comes from
section (b) of Rule 3.348 - Accessories Added to Motor Vehicles.
However, repair parts and accessories are not one and the same and are
treated differently for sales tax purposes when purchased for rented and
leased motor vehicles.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas.You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy
Tax Administration Division