The Massachusetts Appellate Tax Board (ATB) held that an auto body repair shop owed sales tax on the full receipts from its repair services because it failed to separately state nontaxable labor charges from taxable tangible personal property costs, notwithstanding that the shop itself paid sales tax when purchasing the tangible personal property incorporated into repaired vehicles. The Department of Revenue issued the taxpayer a double tax assessment under G.L. c. 62C, § 28 based on the taxpayer’s failure to timely file returns after receiving a notice to register and file, its submission of “zero” sales tax returns, and its refusal to amend those returns after receiving a notice of incorrect or insufficient return. The ATB upheld the assessment of sales tax on the full repair charges but abated the double tax penalty finding that the taxpayer’s returns were “proper” albeit not “correct” because the taxpayer sincerely believed it was the consumer of parts and materials used in its repairs, relying on the advice of its accountants. The decision makes clear that had the auto body shop issued a resale certificate when acquiring the tangible personal property at issue and separately stated labor and materials charges on its customers’ bills, Massachusetts would have been entitled to a single sales tax on the shop’s charges for the tangible personal property components only.
Lofa Auto Body, LLC v. Comm’r of Revenue, Docket No. C348289 (Mass. App. Tax Bd. Apr. 7, 2026).