Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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R

490.0000 RETURNS, DEFECTS AND REPLACEMENTS—Regulation 1655

Annotation 490.0432

(b) REPLACEMENTS GENERALLY—MAINTENANCE CONTRACTS

490.0432 Bundled Optional Maintenance Contracts—Printers. A taxpayer offers two types of optional maintenance programs for printers. One provides for the necessary parts and labor to maintain the printer (standard maintenance contract). The other provides for both the standard maintenance contract and also includes disposable toner/ink cartridge as needed. The latter contract is referred to as the "bundled optional maintenance contract."

The seller of the maintenance contract is the consumer of parts and materials used to maintain the printer under both contracts. However, it is the retailer of the toner/ink cartridges furnished under the "bundled maintenance contract." The taxpayer should segregate the retail selling price of the toner/ink cartridges in its invoices and its records. 8/26/96.