LSN-99
This information is not current and is being provided for reference purposes only
LSN-99
Special Notice Concerning the
Use of Resale Certificates
By Repairers of Tangible Personal Property
This LSN is obsoleted in part by AN 2000(8)
PURPOSE
The purpose of this Notice is to describe the situations in which a repairer of tangible personal property (other than motor vehicles) may issue a resale certificate to a supplier when purchasing parts and materials to be used in providing repair services.
SALES TAX TREATMENT PRIOR TO JULY 1, 1989
If the value of the parts or materials used in the repair services was insignificant in relation to the charge for labor, the repairer was deemed to be the consumer of the parts or materials and was required to pay the sales tax to the supplier of such parts or materials.
SALES TAX TREATMENT ON OR AFTER JULY 1, 1989
Resale certificates may be issued to suppliers of parts or materials by repairers (even though the value of the parts or materials used in the repair services is insignificant in relation to the charge for labor) IF, when used, each such part or material becomes an integral part of the repaired property.
An integral part is a part or material that retains its separate identity even after being incorporated into repaired property. Examples include: heels and soles used in shoe repair, springs, gears and crystals used in watch repair, chips used in computer repair and transistors used in radio repair.
An integral part does not include such items as: paint, glue, thread, lubricant, cleaning solvent, polish, stain, solder and wire. (These items are considered to be consumed by the repairer and are not purchased for resale to customers.)
SALES TAX REPORTING
Repairers must in all instances separately state the charge for repair services and the charge for integral parts.
Where the total charge for integral parts is $10 or more, such charge for integral parts must be itemized on the invoice to the customer.
Where the total charge for integral parts is less than $10, such charge for integral parts must be either itemized on the invoice to the customer or listed on the invoice as a charge for miscellaneous parts.
The entire charge (parts and labor) made by the repairer to the customer is subject to sales tax at the rate of 8%.
LSN-99 (9/1/89)