QUESTION DETAIL
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Our company is in the auto repair business and we're based in Texas. We're wondering if the labor to perform the repairs are subject to sales tax?
ANSWER
The BIDaWIZ Team's Answer:
The short answer is that labor is not subject to Texas state sales tax for any repairs made to a motor vehicle. For instance, if your auto repair shop replaces a tire, that would not be subject to sales tax. Having said that, any installation work you do for accessories such as car stereos, amplifiers, and alarm systems would be subject to sales tax. In addition, this same rule applies to remodel work done on a vehicle. This is referenced in Texas State Rule 3.290 and Texas Tax Publication 94_113.