(a)
Imposition.
(1) The tax is imposed on receipts from every
sale of the services of installing, maintaining, servicing or repairing
tangible personal property, by any means including coin-operated machines,
whether or not any tangible personal property is transferred in conjunction
with the services.
(2) Installing
means setting up tangible personal property or putting it in place for use.
Example 1:
An individual pays for the installation of a washer and
dryer to existing wiring and plumbing in his home. The charge for installation
is taxable.
Example 2:
An individual contracts with a company for a central
station burglar alarm and guard service. The company charges him a fee at the
commencement of the contract for installing wiring and alarm devices. The
charge to the customer is taxable as an installation charge.
(3) Maintaining, servicing and repairing are
terms used to cover all activities that relate to keeping tangible personal
property in a condition of fitness, efficiency, readiness or safety or
restoring it to such condition.
Example 3:
The charge for the repair and tuning of a piano is
taxable.
Example 4:
The charge for the service of lubricating a motor vehicle
is taxable.
Example 5:
The charge for washing an automobile is taxable, whether
the washing is performed manually or by a coin-operated machine.
Example 6:
A company operates a diagnostic service in which it tests
an appliance for a set fee, but does not repair the appliance. The charge for
the diagnostic service is taxable.
Example 7:
A company operating a central station burglar alarm system
charges its customers a fee for repairs to the system necessitated by damage
beyond the control of the company. It does not charge its customers for repairs
required by malfunctioning of the system. The charge by the company is taxable
as a charge for repair.
(4)
The
installation of tangible personal property by a person furnishing services
subject to tax under section
1105 (b) of the Tax Law
(utility services) is a service subject to the tax imposed under section
1105 (c)(3) of the Tax Law
when:
(i) the tangible personal property is
installed at the premises of the purchaser of the utility service;
(ii) the tangible personal property installed
is for use in connection with a utility service; and
(iii) the tangible personal property is
purchased and owned by the person purchasing the utility service. For
application of the tax on the
installation of tangible personal property owned
by a person furnishing a utility service, see section
527.2(d)
of this Part.
Example 8:
A person purchases a unique type telephone and requests the
telephone company to install it in his home for use in connection with the
telephone service subscribed to. The installation service is taxable under
section 1105 (c)(3) of the Tax
Law.
(5)
(i) The installation of floor covering is
subject to tax unless it is the installation of the initial finished floor
covering in new construction, in a new addition to existing construction or in
a total reconstruction of existing construction.
(ii) The term floor covering includes carpet,
carpet tile, carpet padding, linoleum and vinyl roll floor covering, linoleum
tile, vinyl tile and other similar floor coverings.
Example 9:
A floor covering contractor removes wall-to-wall carpet and
installs new wall-to-wall carpet padding and carpeting as its replacement. The
total charge for the installation and sale of the padding and carpet is subject
to sales tax because this is merely the replacement of the existing floor
covering.
Cross-reference:
For a detailed discussion of the taxability of the
installation of floor covering, see section
541.14
of this Title.
(b)
Exemptions.
(1) The services of installing, maintaining,
servicing or repairing tangible personal property are not taxable if the
services were performed for resale. See section
526.6(c)(8)
of this Title.
(2) Maintaining,
servicing or repairing tangible personal property is not taxable if the
property maintained, serviced or repaired is held for sale in the regular
course of business.
Example 1:
A repair shop charges a boat dealer for reconditioning boat
motors which the dealer will resell. The reconditioning of the motors is not
taxable because the motors are for resale.
(3) Tax is not imposed on the services of
laundering, dry-cleaning, tailoring, weaving, pressing, shoe repairing, and
shoe shining. For example, alterations to clothing, although considered to be
maintaining, servicing, or repairing property, are excluded from tax because
they are tailoring. This would include tailoring performed either by an
independent tailor or seamstress, or by a tailer or seamstress employed by the
vendor of the clothing so long as the vendor's charge for the tailoring is
reasonable and separately stated from the charge for the clothing itself, and
regardless of whether the clothing qualifies for the exemption from tax under
section 1115 (a)(30) of the Tax
Law. However, when a person provides raw materials to a tailor or seamstress
and the tailor or seamstress produces an article of clothing for the person,
the tailor's or seamstress' work constitutes the production of clothing (which
is not tailoring); and the charge for such service would be subject to State
and local sales and use tax (see 527.4[b] of this Part).
(4) Tax is not imposed on the charge for
installation of tangible personal property which, when installed, will be an
addition or capital improvement to real property. For a detailed discussion of
repairs or capital improvements to real property, see section
527.7
of this Part. For a detailed discussion of the taxability of floor covering,
see section
541.14
of this Title. See section
544.4
of this Title regarding installing, repairing, servicing and maintaining mobile
homes and factory-manufactured homes.
(5) Commercial vessels.
(i) Tax is not imposed on receipts from
services rendered to commercial vessels and property used by such vessels for
fuel, supplies, maintenance and repairs when such vessels are primarily engaged
in interstate or foreign commerce.
Example 2:
A steamship company engages a shipyard to clean and paint
the hull of a commercial vessel engaged in foreign commerce. The services
rendered by the shipyard are not subject to tax.
(ii) A commercial vessel is any type of water
craft used or engaged in the transportation for hire of persons or property on
water. Any vessel used or engaged for other purposes on more than an occasional
basis is not a commercial vessel. A commercial vessel is primarily engaged in
interstate or foreign commerce where 50 percent or more of the receipts from
the vessel's activities are derived from interstate or foreign commerce. (See
section
528.9[a]
for further definitions applicable to commercial vessels.)
(iii) Tax is imposed on receipts from
services rendered to articles purchased for the original equipping of a new
ship.
(iv) Receipts from services
rendered to marine cargo containers used by or for commercial vessels engaged
in foreign or interstate commerce, are excluded from the imposition of sales
tax.
(6) Installation,
repair and maintenance services rendered in or about the residence of a private
homeowner or lessee are not subject to tax when:
(i) the person performing the services is
engaged directly by the homeowner or lessee; and
(ii) the person performing the services is
not in a regular trade or business, offering his services to the public.
Example 3:
A homeowner engages a college student to clean and wax his
automobile. The student is not in the business of servicing automobiles and
does the work in the homeowner's garage. The cleaning and waxing of the
automobile is not subject to tax.
Example 4:
A college student advertises in the classified that he will
wash and wax automobiles for a fee. The washing and waxing of automobiles is
taxable.
(7)
Wages, salaries and other compensation paid by an employer to his employee for
installation, repair or maintenance service rendered by the employee under an
employer- employee relationship are not receipts subject to the tax.
(8) Farming.
There is an exemption from tax for services rendered to
certain tangible personal property used in farm production. For a detailed
discussion and description of this exemption, see section
528.7
of this Title.
(9) Mobile
homes.
Tax is not imposed on the charge for the installation of a
mobile home. For a detailed discussion and description of this exception, see
Part 544 (Mobile Homes and Factory Manufactured Homes) of this
Title.
(10) Tax is not
imposed on receipts from services rendered to certain machinery, equipment or
apparatus, or parts, tools or supplies used in connection therewith, as
described in section
1105-B of the Tax Law. For a detailed
discussion and description of this exemption, see section
528.13
of this Title.
(c)
Maintenance and service contracts.
(1) The purchase of a maintenance or service
contract is a taxable transaction.
(2) The vendor making sales of such contracts
may purchase for resale any tangible personal property which is transferred to
his customer in connection with the services rendered.
(3) Any charge made for services rendered in
addition to the purchase price of the maintenance or service contract is
taxable.
Example 1:
A vendor selling home appliances also offers a 12-month
extended service contract with unlimited parts and labor. The charge for the
service contract is taxable.
Example 2:
The same vendor also offers a service contract for the
price of $50 under which the purchaser will receive one service call at no
additional charge, including parts and labor, and each additional service call
will cost the purchaser $5 for parts and labor. All the charges are receipts
subject to tax.
(d)
Warranty work.
(1) Repair or maintenance services rendered,
without charge to a customer under a warranty agreement are not
taxable.
(2) The vendor performing
the warranty services may purchase for resale any tangible personal property
which is transferred to his customer in connection with the services
rendered.
(3) Charges for services
rendered which are not covered by the warranty are taxable.
(4) Where a manufacturer reimburses a vendor
or repairman performing warranty work, the reimbursement is not taxable, as it
was for resale.
