California’s auto repair sector—servicing over 175,000 repair establishments and employing more than 1 million Americans—is vital to keeping millions of vehicles on the road. With increasing regulatory oversight, CDTFA audits are targeting auto shops for sales tax compliance missteps, and even small mistakes can cost thousands.
CDTFA is actively auditing auto repair garages, service stations, and specialty shops for errors in taxing parts, labor, warranties, and consumables.
We’ll analyze your sales tax exposure, explain recent CDTFA audit tactics, and outline your defense—at zero cost.
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No. Parts, fluids, and materials are taxable. Labor to repair or maintain used vehicles is exempt—but fabrication, work on new vehicles, and some specialty repairs are taxed.
Yes. Failing to separate labor & parts, misusing lump-sum billing, or missing documentation puts you at risk for audited back taxes and penalties.
Always clearly itemize and subtotal parts, labor, supplies, and state fees on invoices. Properly use resale certificates. Retain all sales records for at least four years.
If you sell tires, batteries, or make lump-sum repair charges, or if your records are incomplete, you face a higher risk. Free audit risk review helps you identify problems before CDTFA does.
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