SN 91(9)

Changes Affecting the Sales and Use Taxes on
Motor Vehicle Repair Services

This publication has been superseded by PS 92(8)

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.

PURPOSE:  This Special Notice describes changes made by 1991 Conn. Pub. Acts 3, §103 affecting the sales and use taxes on motor vehicle repair services.  This Special Notice also describes policies, some unmodified since July 1, 1989 and some modified as of October 1, 1991, that motor vehicle repairers must follow for purposes of the Sales and Use Taxes Act.

EFFECTIVE DATE:  Effective upon issuance and applicable to the provision of motor vehicle repair services on or after October 1, 1991.

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

TAX RATE DECREASE: The tax rate that will apply to motor vehicle repair services provided on or after October 1, 1991 will decrease from 8% to 6%.

REPAIR SERVICES TO BE TAXED, WHETHER OR NOT VEHICLES ARE USED IN A TRADE OR BUSINESS:  The provision of motor vehicle repair services will be taxed, whether or not a vehicle is used in a trade or business.   Accordingly, motor vehicle repairers will no longer be 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 will be taxed even if the vehicle is strictly for personal use.

SERVICES TO BE TAXED WHERE PROVIDED:  Motor vehicle repair services will be considered to be provided where the repairs are performed.   Accordingly, motor vehicle repairers will no longer be required to inquire of customers whether the business situs of the vehicle is located outside Connecticut, because, if repair services are performed at a Connecticut location, such services are Connecticut sales subject to the Sales and Use Taxes Act.

BILLS TO CUSTOMERS:  Motor vehicle repairers will continue to be required to separately state on their bills to their customers the charge for repair parts and the charge for repair services.  A person providing motor vehicle repairs services at a Connecticut location will be making Connecticut sales (of parts and services) subject to the Sales and Use Tax Act.

SERVICES CONSIDERED TO BE MOTOR VEHICLES REPAIR SERVICES:  Motor vehicle repair services 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, rustproofing, 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 towing and storing of motor vehicles.

SALES OF REPAIR PARTS AND MOTOR VEHICLE REPAIR SERVICES BY MOTOR VEHICLE REPAIRERS TO MOTOR VEHICLE DEALERS OR LEASING COMPANIES:  Motor vehicle dealers and motor vehicle leasing companies may issue a resale certificate to motor vehicle repairers selling repair parts, where the repair parts are integral parts of motor vehicles that are held for sale or for lease, respectively, in the regular course of their business.  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 sale or for lease, respectively, in the regular course of their business.   Integral parts are those parts or materials that retain their separate  identity after being incorporated into repaired property.  Examples of integral parts include, but are not limited to, transmissions, alternators, clutches, belts, batteries, power steering fluids, windshield wipers, water pumps, mufflers, tires, hoses, oil filters, oil and spark plugs.  Examples of parts or materials that are not integral parts include, but are not limited to, paint, cleaning solvents, polish, wax, paint thinners and reducers, primers, sealants, undercoating and corrosion-protection materials, fabric protection materials, tape, sandpaper and abrasives, masking paper and rags.

EFFECT ON OTHER DOCUMENTS:  LSN-95 (Rev. 6/90) is superseded and may not be relied upon with respect to motor vehicle repair services provided on or after October 1, 1991. 

SN 91(9)
Sales and Use Taxes
Issued 10/91
TPS/0023d/1091