Virginia Enacts New Sales Tax Exemption for Auto Repair Diagnostic Work and Emergency Roadside Service

Effective July 1, 2023, Virginia has enacted legislation that creates a sales and use tax exemption for amounts separately charged for labor rendered in connection with diagnostic work for automotive repair and emergency roadside service for motor vehicles, regardless of whether there is a sale of a repair or replacement part or a shop supply charge. Under previous law, amounts charged for diagnostic services were exempt from sales tax when those charges were not made in connection with the sale of tangible personal property or the tangible personal property exchanged was inconsequential to the transaction.

(H.B. 1677, Laws 2023, Effective July 1, 2023; Fiscal Impact Statement)

Posted on June 27, 2023