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Auto Repair - Service and Installation of Tangible Personal Property


There are various career paths that involve the repair and installation of tangible personal property. These career paths range from auto repair, appliance repair, lawn mower repair, and watercraft repair, just to name a few. In this section we will be taking an in depth look at how the repair and installation of tangible personal property relates to auto repair and sales tax. An Ohio tax law that affects the taxability of the repair and installation of tangible personal property is Ohio Revised Code Section 5739.01(YY).Mechanic

Ohio Revised Code Section 5739.01 (YY) defines “tangible personal property” as personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses. Repair and installation to tangible personal property can be both subject to and exempt from sales tax. In general, repairs to tangible personal property are subject to sales tax unless the property being repaired is itself exempt from sales tax. This is also true for installation of tangible personal property.

Motor vehicles are considered tangible personal property, therefore sales tax must be charged on the total cost of the repairs. This includes the cost of parts, labor, and any other miscellaneous shop expenses that are included in the price.

A career path in auto repair may lead you in many directions. You may decide on opening your own repair shop, working for an automobile dealer or working for an automotive repair and maintenance shop to just name a few options. Depending on the nature of the business, a career in auto repair may require various licenses and registrations. Auto repairs are regulated by Ohio’s Auto Repairs and Services Law. If you have questions, contact the Ohio Attorney General’s Office at (800) 282-0515 or (614) 466-4320. Information can also be found online at www.ohioattorneygeneral.gov

Below are some examples of what parts of certain auto repairs are taxable.

Example #1:
Joe has developed a leak in the radiator of his automobile. He brings his automobile to Holly Radiator Repair. Holly Radiator repairs the radiator. Joe is charged $99.95 in parts and $100.00 in labor for a subtotal of $199.95. The subtotal of $199.95 is subject to the tax.

Another aspect related to auto repair you may come into contact with is the replacement tire fee. The fee is paid by any wholesale distributor of replacement tires or by any retail dealer acquiring tires on which the fee has not been paid. The fee applies to the sale of new tires with rims of 13 inches or more designed for use on a motor vehicle and sold as replacements. Tires that are used or retreaded or tires on a new motor vehicle are not subject to the fee.

Other careers that are highly affected by the repair of tangible personal property include: appliance repair and HVAC repair. As stated above, in general, repair to tangible personal property is subject to sales tax unless the property being repaired is itself exempt from sales tax. This is also true for installation of tangible personal property.

Example #2:
Joe needs to have the motor in  his automobile replaced after putting 140,000 miles on it. He brings the  automobile to his local car dealer. The dealer replaces the motor with a  brand new motor. The dealer charges Joe $4,000.00 for the motor and $1,000.00  labor to install the motor for a subtotal of $5,000.00. The subtotal of  $5,000.00 is subject to the tax.