How did Texas tax vehicle, camper, commercial-building, residential, and new-construction window tinting, plus auto-upholstery and furniture repair?

Plain-English summary

Automobile windshield tinting was treated as motor-vehicle maintenance. Under a lump-sum contract, the provider did not tax the customer and paid tax on materials. Under a separated contract, it taxed the customer on the materials sales price but not labor. The same treatment applied to state-licensed camper trailers.

Tinting windows in existing commercial buildings was taxable remodeling on the total charge. Tinting residences and new structures was not taxable labor; materials followed lump-sum or separated-contract treatment.

Auto-upholstery repair labor was not taxable as repair of a motor-vehicle component, with materials handled by contract type. Furniture repair, including vinyl furniture repair, was taxable on the total charge.

What this means for you

Under the 1988 guidance, the property being tinted or repaired and the contract format controlled the result. A health-related reason did not exempt taxable materials used in vehicle tinting.

Common questions

Was commercial-building window tinting taxable? Yes, on the total charge.

Was residential or new-structure tinting labor taxable? No.

Was auto-upholstery repair labor taxable? No.

Was furniture repair taxable? Yes, on the total charge.

Citations and references

• 34 Tex. Admin. Code Rule 3.357(b)(1), cited for real-property tinting.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8802L0859C05

Original ruling text

February 4, 1988

Dear ***:

On behalf of Mr. Bullock, I hope you'll accept my apology for the delay in
answering your question involving changes in the sales tax law. This isn't the
way we normally do business.

Our people were, and still are, swamped by a deluge of inquiries as they
attempted to interpret provisions of the new law and draft rules which would
not adversely impact businesses. In many instances, an answer to a question
just wasn't available when the question arrived.

Tinting windshields of automobile is considered maintenance of a motor vehicle.
If you operate under lump-sum contracts, you will not collect sales tax on the
lump-sum charge. You will pay sales tax on materials used to perform the
contract at the time you purchase them from the supplier. If you operate under
a separated contract, you must collect sales tax from your customer based on
the selling price of the materials. The labor is not taxable. There is no
exemption for health reasons from the tax due on the materials.

Camper trailers which are licensed by the State Department of Highways and
Public Transportation's Motor Vehicle Division will be considered motor
vehicles. The tinting will be treated the same as above for motor vehicles.

Window tinting in commercial buildings such as store fronts or office buildings
is considered remodeling of real property and the labor is taxable. See Rule
3.357(b)(1). You should collect tax on the total charge to the customer.

Window tinting residences and new structures is not taxable. See Rule
3.357(b)(1), enclosed. If your contract with your customer is a lump-sum
charge, then you should pay tax on the materials when you buy them. If the
contract has separated amounts for labor and materials, then you should collect
tax from the customer on the sales price of the materials.

You must collect the applicable local taxes if your place of business is within
a local taxing jurisdiction. If your place of business is outside a local
taxing jurisdiction but you go into a local taxing jurisdiction, you must
collect the applicable local taxes for that taxing jurisdiction.

The repair of auto upholstery is considered the repair of a component part of a
motor vehicle. The labor is not taxable. If your charge is a lump-sum amount,
you should pay tax on the materials when you buy them and not charge the
customer tax. If it is a separated contract, you should charge the customer
tax on the materials.

The repair of furniture is taxable. When repairing vinyl on furniture, you
should charge tax on the entire charge to repair the furniture.

This option is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call our toll-free
number 1-800-531-5441. This regular number is 512/463-4600. You may write me
at the Tax Policy Division.

Sincerely,

Julie Pesl
Tax Policy Division