TX 8904L0957A12 Motor Vehicle Tax 1989-04-03

How did Texas tax labor and parts for repairs to farm, livestock, horse, and utility trailers?

Short answer: Repair labor was not taxable. Separately billed parts were taxable unless the trailer was unlicensed for highway use and operated exclusively on the farm or ranch by the original producer, documented by an exemption certificate. For lump-sum repairs, the shop paid tax on its parts cost.

Apply this to your situation

This page answers the general question as of 1989. Ezel answers yours, under current Texas tax law, with citations.

Disclaimer: This is an official 1989 Texas Tax Correspondence letter on trailer repairs. It predates modern Private Letter Ruling reliance terms and cannot bind the Comptroller for unrelated taxpayers. Rules 3.287, 3.292, and 3.296, trailer classification, highway licensing, exclusive farm use, original-producer status, certificates, repair billing, and parts tax may have changed. The enclosed rules are not reproduced in STAR. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Tax Correspondence Division treated the listed trailers as motor vehicles and excluded repair labor from tax.

Separately stated repair parts were taxable unless the trailer was unlicensed for highway use and operated exclusively on the farm or ranch by the original producer. The shop could accept an exemption certificate for an eligible unit. For lump-sum repairs, the shop paid tax on its cost of parts.

What this means for you

The parts exemption depended on all stated use and licensing conditions. Verify current agricultural rules and certificates.

Common questions

Q: Was repair labor taxable?

A: No.

Citations and references

Rules 3.287, 3.292, and 3.296 — cited for exemption certificates, repairs, and agriculture.

Source

STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
Opinion: https://star.comptroller.texas.gov/view/8904L0957A12

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN 78774

April 3, 1989

Dear ***:

Thank you for your letter of March 23, 1989, concerning the taxability of
repairs, parts and labor on farm trailers, horse trailers, cattle
trailers,
livestock trailers and utility trailers.

The above trailers are considered to be motor vehicles. The labor to
repair
motor vehicles is not taxable.

Separately stated charges for repair parts are taxable unless the
trailers is
not licensed for highway use and operated exclusively on the farm or
ranch by
the original producer (the farmer/rancher). You would be responsible for
tax
on your cost of parts in all repairs if you lump-sum bill your customers.

You may accept an exemption certificate from the farmer or rancher for
the
tax on repair parts on eligible units described above.

Enclosed is a copy of Ruling 3.292, Repair, Remodeling, Maintenance, and
Restoration of Tangible Personal Property. Also enclosed is Rule 3,296,
Agriculture and Rule 3.287, Exemption Certificate.

This opinion 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 1-800-242-5555. The regular number is 512/463-4600. You may
write me
at Tax Correspondence, Comptroller of Public Accounts.

Sincerely,
Curt Swenson
Tax Correspondence

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