A. SERVICES.
1. The service of initial installation,
alteration, addition, cleaning, refinishing, replacement and repair of the
following items of tangible personal property are subject to the tax: motor
vehicles, aircraft, farm machinery and farm implements, motors of all kinds,
tires, batteries, boats, electrical appliances, and electrical devices,
furniture, rugs including carpets, flooring, upholstery, household appliances,
television and radio, jewelry, watches, clocks, engineering instruments,
medical instruments and surgical instruments, machinery of all kinds, bicycles,
office machines, office equipment, shoes, tin and sheet metal, mechanical tools
and shop equipment. (See also GR-9.17, GR-30, GR-38.2, and GR-57.)
2. The tax applies to the enumerated services
performed on the items listed in GR-9(A)(1) whether or not the items are
affixed to real property.
B. ADDITIONAL SERVICES. Additional services
subject to gross receipts tax include: service of providing transportation or
delivery of money, property or valuables by armored car; service of pool
cleaning and servicing; pager services; telephone answering services; service
of parking a motor vehicle or allowing a motor vehicle to be parked; service of
storing a motor vehicle; service of storing furs; service of providing indoor
tanning at a tanning salon; lawn care and landscaping services (see GR-9.2);
service of providing cleaning or janitorial work (see GR-9.4); wrecker and
towing services (see GR-9.5); collection and disposal of solid wastes (see
GR-9.6); cleaning of parking lots and gutters (see GR-9.7); dry cleaning and
laundry services and industrial laundry services (see GR-9.8); ,mini warehouse
and self-storage rental services (see GR-9.9); body piercing, tattooing, and
electrolysis services (see GR-9.10); pest control services (see GR-9.11);
security and alarm monitoring services (see GR-9.12); boat storage and docking
fees (see GR-9.13); furnishing of camping spaces or trailer spaces at public or
private campgrounds (see GR-9.14); locksmith services (see GR-9.15); and pet
grooming and kennel services (see GR-9.16).
C. DUES AND FEES. Dues and fees paid to
health spas, health clubs, and fitness clubs are subject to gross receipts
tax.
D. SERVICE CONTRACTS,
MAINTENANCE AGREEMENTS, & EXTENDED WARRANTIES.
1. Sales tax shall apply to the gross
receipts derived from the sale of contracts, including service contracts,
maintenance agreements and extended warranties, which in whole or in part
provide for the future performance of or payment for services which are subject
to gross receipts tax, including home warranty contracts that provide for
repair or replacement of appliances, devices, machinery or any other items
included in the contract. The seller of the contract must collect and remit the
tax due on the sale of the contract except when the contract is sold
simultaneously with a motor vehicle in which case the purchaser of the vehicle
shall pay sales tax on the purchase of the contract at the time of vehicle
registration.
2. Sales tax shall
not be collected from the consumer on labor or parts used in the performance of
services covered by a taxable service contract, maintenance agreement or
extended warranty or home warranty contract.
Example 1: Consumer purchases a new vehicle and an extended warranty at
the same time. When customer registers the vehicle, he will pay sales tax on
the purchase price of the vehicle and the purchase price of the extended
warranty. Service and parts provided under the warranty will not be subject to
sales tax.
Example 2: Consumer purchases a new computer and a service contract.
The seller of the computer collects sales tax on the purchase price of the
computer and the service contract. Service and parts provided under the
warranty will not be subject to sales tax.
Example 3: Consumer purchases a home warranty contract in connection
with the purchase of a residence. The purchase price of the home warranty
contract may be collected with the closing costs of the real estate transaction
or may be paid directly by the real estate purchaser to the person or entity
designated by the seller of the contract. The seller of the contract, or the
seller's designated agent, collects sales tax on the purchase price of the home
warranty contract. Labor and tangible personal property provided under the
warranty will not be subject to sales tax.
3. If the seller of a taxable contract allows
the purchaser to pay for the contract in monthly or other periodic
installments, then the seller may report and remit sales tax on the periodic
payments.
