Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
330.0000 LEASES OF TANGIBLE PERSONAL PROPERTY—IN GENERAL—Regulation 1660
(b) RENTAL RECEIPTS—ITEMS INCLUDED AND EXCLUDED
330.3225 Damage Charges. Payments made by a lessee for damages to equipment resulting from improper use or abuse of the equipment are not part of taxable rental charges.
Also, the amount paid by the lessor with respect to the cost of parts used in repairing the damage in question is not taxable. Following the repair of the damage, the parts become incorporated into the leased item. The fact that tax is paid on the rental receipts negates the requirement of paying tax on any component of the unit. 2/11/75.