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This Ruling has been obsoleted by AN 2000(8)

Ruling 89-178

Motor Vehicle Repairs

The labor charges for repairs to the engine of a motor vehicle, which is not used in a trade or business, are exempt from the sales and use tax even if the engine is removed from the automobile by the customer and brought into X Company for repair services.

The labor charges for repairs to the engine of a motor vehicle which is used in a trade or business are subject to sales and use tax.

In both of the above situations, the charges for repair parts are taxable.

In the event that a motor vehicle repair shop subcontracts engine repair work to X Company, the parts and/or labor may be purchased for resale provided the motor vehicle repair shop issues a bona fide resale certificate to you.

Enclosed is a Special Notice Regarding Taxation of Repair Services to Motor Vehicles Used in a Trade of Business. Please refer to IV. Illustrations for information concerning the statement that must be printed or stamped on the invoice and signed by the purchaser. The statement should indicate whether you are rendering services to a personal vehicle or business vehicle.


October 30, 1989