Articles · Texas sales tax
For a Texas motor-vehicle repair shop, how you write the invoice changes who owes the sales tax. Two shops doing identical work can end up with completely different obligations — because one separates labor on the invoice and the other does not.
Reviewed August 2026 · Mint Associates Ltd Co · Houston, Texas
Everything on this page follows from these two. Get them straight and the rest is invoice design.
Parts and labor appear as separate lines. You buy the parts tax-free for resale, then collect tax from the customer on the parts charge only.
Tax on the $300 parts charge at 8.25% = $24.75. Customer total $724.75. The $400 labor line carries no sales tax.
The separately stated labor line is doing the work. Texas treats qualifying motor-vehicle repair labor as nontaxable — but the separation is what makes it visible. Bury labor inside one price and a different rule takes over.
Now the invoice reads only: Brake repair — parts and labor: $700.
What you do not do
Collect sales tax from the customer on the $700 lump-sum repair charge.
What happens instead
You pay the sales tax when you buy the repair parts. The burden moves from your customer to your margin.
Which is why invoice design is a tax decision, not a formatting preference. It decides whose money pays the tax — and a shop running lump-sum invoices while buying parts on a resale certificate has the worst of both.
Texas separates what goes into the customer's vehicle from what your shop burns through doing the work.
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{{ g.items }}Then document, in writing, whether the shop follows the separated-invoice or the lump-sum model — and make sure your parts purchasing matches it.
Everything above is about motor-vehicle repair. Texas treats other work differently — repairs to other tangible personal property follow their own rules, and repair or remodeling of nonresidential real property is a separate framework again.
So a shop that also does fabrication, installs equipment on a customer's premises, or works on buildings cannot run one sales-tax rule across everything. Each line of work needs its own determination.
Why we know this
That is where he saw which invoices survive an audit and which create assessments. Sales tax cases turn on documentation, not arithmetic — and repair shops are audited on exactly the distinctions on this page.
Texas sales & franchise taxGeneral information for Texas businesses, not individualized tax advice. Taxability depends on your specific facts, contracts and invoicing, and Comptroller rules change over time. Mint Associates does not provide legal services.
We will tell you whether your parts, labor and shop-supply lines are set up the way your purchasing assumes they are. Thirty minutes, no obligation.