Repairs

Doing business

Repairs

Altering, improving, installing, cleaning, normal maintenance procedures, and painting are all taxable in the same manner as a repair.

For consumers

Repairs on vehicles for consumers are retail sales and are subject to tax under the Retailing classification of B&O tax on the total charge made for the repair. Retail sales tax must also be collected on the total charge.

For repairs covered by warranty, see Warranties.

Wholesale

Charges for repairs performed for persons who will resell the repaired vehicle to another are subject to tax under the Wholesaling classification of B&O tax. A properly completed resale certificate (pdf) must be given to the company performing the repairs.

Native Americans

Repairs performed in Indian country on vehicles belonging to Native Americans are not subject to retail sales tax or Retailing B&O tax.

Repairs performed outside of Indian country are subject to sales tax and B&O tax.

However, repairs performed outside of Indian country on vehicles belonging to Native Americans are not subject to the retail sales tax if the seller delivers the vehicle inside Indian Country. The income should be reported on the excise tax return and a deduction should be taken on the deduction detail sheet under "Sales to Indians".

See Native Americans for more information.

Parts for repairs

Dealers may purchase parts to repair vehicles without paying the retail sales tax by providing a properly completed resale certificate (pdf) to the vendor.

Equipment used for repairs

Diagnostic equipment, other equipment and tools used by employees of the dealership to make repairs are subject to the retail sales tax at the time of purchase. If retail sales tax is not paid, the use tax must be paid on the excise tax return at the time the equipment is put to use in Washington.

Consumable supplies

Consumable supplies refer to supplies that are not resold to the customer. The dealership must pay retail sales/use tax on such supplies used or consumed while performing repairs to customers' vehicles.

Examples

1. The customer brings in a vehicle for an oil change and lube job. As part of the service, all vital fluids are checked. The oil, oil filter, air filter, the lubricants and all vital fluids may be purchased by the dealer using a resale certificate (pdf) because they are resold to the customer.

2. The customer brings in a vehicle to have its brakes repaired. The brake drum, pads and shoes which are replaced may be purchased by the dealer using a resale certificate (pdf). The lubricants and the brake fluid may also be purchased for resale. The total charge to the customer is subject to the retail sales tax.

Certain nonresident exemptions

Persons visiting Washington from other states, possessions, and provinces that do not impose a three percent (3%) or more retail sales tax may receive an exemption (pdf) from the retail sales tax on the purchase of vehicle parts and other tangible personal property for use outside this state. See Nonresidents for a list of the states, possessions, and provinces that qualify.

The exemption does not apply to charges for retail services such as repair services, automobile towing, or automobile parking. The entire repair service charge is taxable even though the parts and labor may be separately stated.

The dealer must see one piece of picture identification proving the customer is from one of these locations. The identification must be a valid driver's license from the jurisdiction in which the out-of-state residency is claimed or a valid identification card issued by the out-of-state jurisdiction which:

A) bears the photograph of the holder,
B) shows the holder's residential address, and
C) is issued for the purpose of establishing residency.

A record showing the type of proof accepted, including any identification numbers and the expiration date, must be kept in the dealer's files. A copy of the picture ID satisfies this requirement.

ONE PIECE OF ID IS NOT SUFFICIENT TO PURCHASE A VEHICLE - OTHER REQUIREMENTS MUST BE FOLLOWED.

See Nonresidents for more information.

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