Sales and Use Overview of Repair and Maintenance

Jeannotte, Jennifer R.
July 2001
Journal of State Taxation;Summer2001, Vol. 20 Issue 1, p57
Academic Journal
Sales taxes are generally imposed on the sale of tangible personal property. Services that are most frequently taxed are those that are performed on tangible personal property. Repair and maintenance of tangible personal property is an intriguing subject. The various ways that states distinguish between nontaxable and taxable services allow for very few generalizations to be made. Sales of repair services are taxed unless an exemption applies. Usually the service must be separately stated to be covered under this exemption. Lump-sum repairs including materials and labor are treated differently depending on how the state treats labor. Repair return rules vary when tangible personal property is sent out of state for repair and then returned. Some states require collection of tax where the item was repaired; others allow the tax in the destination state. Maintenance and service contract treatment often varies from state to state as well. Additionally, whether the contract involves just parts, just repair, or both will impact the treatment. This article discusses the tax treatment of repair and maintenance in four states: Ohio, Illinois, Florida Wisconsin.


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