California Eyeing Car-Repair Sales Tax - BodyShop Business

California Eyeing Car-Repair Sales Tax

Auto repairs performed in California may be subject to a new sales tax if Gov. Arnold Schwarzenegger (R) gets his way. 

Facing a budget deficit of more than $10 billion, Schwarzenegger has called a special session of the state legislature to determine how to handle the shortfall. The measure under consideration would raise the sales tax across the board by $.015, or from 5 to 6.5 percent, for all currently taxed items, while at the same time expanding the scope of the tax to include auto repair.

The Automotive Aftermarket Industry Association (AAIA), along with five other aftermarket groups in the state, sent a letter to the governor on Nov. 4 opposing the extension of the sales tax. The letter points out the importance of a well-maintained vehicle to meeting the state’s goal of improving fuel efficiency and reducing greenhouse gasses.

"Our state’s households have to make tough decisions on a daily basis about which goods and services they can afford," the letter says. "A car-repair tax simply makes it more expensive and thus less likely that families will choose automotive services or maintenance over other more immediate necessities."

In addition to AAIA, groups signing the letter included the Automotive Service Councils of California, California Autobody Association, California Automotive Business Coalition, California Automotive Wholesalers Association, and California Service Station and Automotive Repair Association. 

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