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PS 92(8)

Sales and Use Taxes on Charges for Motor Vehicle Repair Services

This publication has been cited in Rulings 93-18 and 94-4 and superseded by PS 92(8.1)


BACKGROUND: Since July 1, 1989, the provision of motor vehicle repair services has been treated as a sale subject to the Sales and Use Taxes Act, when those services were provided to motor vehicles used in a trade or business. The Department issued LSN 95 in July 1989 and then revised it in June 1990. Effective October 1, 1991, the General Assembly extended the sales tax to all motor vehicle repair services, whether or not those services were provided to motor vehicles used in a trade or business. The Department issued SN 91(9) in October 1991.


PURPOSE: This Policy Statement describes rules that motor vehicle repairers must follow in charging sales and use taxes on their sales of motor vehicle repair parts and motor vehicle repair services and in making purchases that are exempt from sales and use taxes. Some of these rules have not been modified since July 1, 1989, other rules were modified as of October 1, 1991 and still other rules will be modified as of October 1, 1992.


EFFECTIVE DATE: As specified below.


STATUTORY AUTHORITY: Conn. Gen. Stat. Section 12-407(2)(i)(M), as amended by 1991 Conn. Pub. Acts 3, Section 103 (June Spec. Sess.).


REPAIR SERVICES ARE TAXED, WHETHER OR NOT VEHICLES ARE USED IN A TRADE OR BUSINESS: Since October 1, 1991, motor vehicle repair services have been treated as sales subject to the Sales and Use Taxes Act, whether or not the motor vehicle is used in a trade or business. Motor vehicle repairers have not been required, and are still not required, to inquire of customers whether the amount paid thereby for repairs will be claimed as a business expense for federal income tax purposes because motor vehicle repair services are subject to tax even if the vehicle is strictly for personal use.


SALES OCCUR WHERE SERVICES ARE PROVIDED: Since October 1, 1991, motor vehicle repair services have been considered, and are still considered, to be provided where the repairs are performed.


BILLS TO CUSTOMERS: Since October 1, 1991, motor vehicle repairers have been required, and are still required, to separately state on their bills to their customers the charge for repair parts and the charge for repair services.


SERVICES CONSIDERED TO BE MOTOR VEHICLE REPAIR SERVICES: Since July 1, 1989, motor vehicle repair services have been considered, and are still considered, to mean all maintenance services that keep a motor vehicle in good working order by preventing its decline, failure, lapse or deterioration, including but not limited to replacing vehicle fluids (e.g., oil), lubricating the chassis, replacing spark plugs and filters, rotating tires, recharging the air conditioning system, rust proofing, and applying fabric protection or paint sealant. Motor vehicle repair services also mean all repair services that mend or bring back as near as possible to original working order a motor vehicle that was damaged, malfunctioning or defective, including any painting or replacements related to the body or any of the operating parts of a motor vehicle. Motor vehicle repair services do not include the towing and storage of motor vehicles.


ITEMS CONSIDERED TO BE PURCHASED FOR RESALE BY REPAIRERS: Since July 1, 1989, motor vehicle repairers have been considered, and are still considered, to be retailers of, and may issue a resale certificate when purchasing, replacement panels or parts, such as transmissions, alternators, clutches, belts, batteries, windshield wipers, water pumps, mufflers, tires, hoses, oil filters and spark plugs, that become a physical component part of a repaired motor vehicle and are transferred with the vehicle to the customer.

As of October 1, 1992, motor vehicle repairers will be considered to be retailers of, and may issue a resale certificate when purchasing, the following items: acrylic finishes, body putty, enamels, flux, lead, lacquers, paint, plastic filler, primers, resins (such as epoxy, polyester, fiberglass cloth and fiberglass matting), rust proofing liquid, sealants, shellacs, solder, stain, thinners and solvents (such as petroleum spirits, solvent naphtha and reducers), undercoating, varnish, waxes and welding rods.


ITEMS NOT CONSIDERED TO BE PURCHASED FOR RESALE BY REPAIRERS: Motor vehicle repairers are considered, and are still considered, to be consumers of, and may not issue a resale certificate when purchasing, the following items: abrasives (such as sandpaper, emery paper and grinding wheels), acetylene, applicators, body work tools, brushes, cleaners, compound pads, drop cloths, face masks, filters, goggles, hand cleansers, masking tape, masking paper, mechanics tools, metal conditioners, oxygen, painters tools, polishing and buffing pads, removers (liquid and paste), respirators, rollers, rubbing compound, spray guns, stencils, strainers, and disposable and reusable wipers. Motor vehicle repairers must pay tax to their suppliers on these items at the time of purchase.


SALES OF REPAIR PARTS AND REPAIR SERVICES BY MOTOR VEHICLE REPAIRERS TO MOTOR VEHICLE DEALERS OR LEASING COMPANIES: Where motor vehicle dealers and motor vehicle leasing companies hold motor vehicles for sale or for lease, respectively, in the normal course of their business, they may issue a resale certificate to a motor vehicle repairer only on the purchase of those repair parts with respect to which motor vehicle repairers are authorized under this Policy Statement to issue a resale certificate. Motor vehicle dealers and motor vehicle leasing companies may also issue a resale certificate to motor vehicle repairers providing motor vehicle repair services, where the services are to motor vehicles that are held for sales or for lease, respectively, in the regular course of their business.


USE TAX ON PURCHASE OF MOTOR VEHICLE REPAIR SERVICES AND REPAIR PARTS OUT-OF-STATE: Persons purchasing motor vehicle repair services or repair parts from out-of-state retailers are required to pay Connecticut use tax on these purchases if the motor vehicle is intended for use and is used within Connecticut. Where the repaired motor vehicle is owned by, and used in carrying on, a business, Connecticut use tax must be reported and paid on such purchases by filing a Form OS-114 (Connecticut Sales and Use Tax Return) on or before the last day of the month following the end of the purchaser's monthly or quarterly taxable period. Where the repaired motor vehicle is not owned by, and used in carrying on, a business, Connecticut use tax must be reported and paid on such purchases by filing a Form OP-186 (Connecticut Individual Use Tax Return) on or before April 15th following the calendar year in which the purchases were made. Form OP-186 may be obtained by calling the Forms Unit of the Department at 203-297-4753. If the purchase of motor vehicle repair services or repair parts has already been subjected to a sales or use tax by another state or political subdivision thereof and payment of such tax has been made, a credit for the tax paid to such other jurisdiction will be allowed in computing the Connecticut use tax to the extent permitted by law.


EFFECT ON OTHER DOCUMENTS: SN 91(9) is modified and superseded by this Policy Statement. SN 91(9) may not be relied upon with respect to motor vehicle repair services provided on or after October 1, 1992. 


PS 92(8)
Sales and use taxes
Issued: 9/25/92