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This Ruling has been obsoleted by PS 94(2)

Ruling 89-97


You have requested clarification as to the effective date of sales and use taxation on maintenance, repair and warranty contracts. It is the position of this Department that:

One who purchases, before July 1, 1989, a product which is accompanied by a manufacturer's warranty or extended service contract is not required to be charged a sales tax on labor performed under such warranty or service contract as long as the consumer does not pay any consideration for such labor or repair.

While the gross receipts received from the sale of products accompanied by a manufacturer's warranty or service contract on or after July 1, 1989 are taxable, the gross receipts received solely for the sale of a warranty or service contract is not subject to tax if the warranty services are contingent upon the future malfunctioning of the product.


September 15, 1989