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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
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435.0000 Producing, Fabricating and Processing Property Furnished by Consumers—General Rules—Regulation 1526
Annotation 435.0470
(b) Repairing, Reconditioning and Installation Distinguished
435.0470 Van Conversions. The following guidelines should be utilized for determining the measure of tax for van conversion work.
(1) Where a van dealer contracts with the conversion company to transform a new motor van into a house car at the request of the customer, the entire operation is a step or process in fabricating or producing tangible personal property. The dealer's charge to the customer for the conversion work constitutes gross receipts from a sale of tangible personal property.
(2) Where the customer provides the van conversion company with a new stock van for conversion into a house car the operation is also a step or series of operations resulting in the production of an end item of property desired by the customer and the entire charge made by the van conversion company is includible in gross receipts. A van will be considered to have been purchased for this purpose if the contract for the conversion work is entered into within 60 days of the date the vehicle was first registered with the Department of Motor Vehicles.
(3) Where the customer provides the van conversion company with a used motor van for conversion the operation constitutes a modification of the existing property. The tax is applicable to the fabrication or production of new parts and equipment or any new parts or equipment sold from inventory but is not applicable to the charge of installing the property sold. For example, the entire charge for constructing a bubble top for the used van would be subject to the tax. However, the charge for installing the new top or any item withdrawn from inventory would not be taxable.
A charge for the services of rearranging items that were part of the original equipment of the used van, amounts to refitting and would be exempt from the tax. 9/8/77.