Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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I

315.0000 INSTALLING, REPAIRING, RECONDITIONING IN GENERAL—Regulation 1546

Annotation 315.0215

(a) IN GENERAL

315.0215 Out-of-State Repairs. Charges for repairs made on an item of tangible personal property at a service center outside California and then shipped to the customer's location inside California by common carrier or U.S. Postal Service would not be considered a sale in this state subject to sales tax.

If the repairman is the retailer of parts used to perform the repair work, use tax would apply to the customer's purchase of repair parts. The repairman is the retailer of the parts if the retail value of the parts is more than 10% of the total charge or if a separate charge is made for the repair parts. Otherwise, the repairman is the consumer of the property. In that case, the customer will not be liable for use tax on the purchase of the repair parts since the out-of-state repairman is the consumer of the items.

In a second situation, repairs are made on an item of tangible personal property at a service center located in California and then shipped to the customer's location outside California by common carrier or U.S. Postal Service.

If the repairman is the consumer of the parts as described above, tax applies to the repairman's purchase of the repair parts from his vendors. If the repairman is the retailer of the parts, either because the value of the parts exceed 10% of the total charge or because the repairman makes a separate charge for the repair parts, the repairman would not be liable for the sales tax if the repairman is required by the contract of sale to ship the parts out of state and does, in fact, ship the parts out of state. 10/31/88.