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 490.0483

(b) REPLACEMENTS GENERALLY—MAINTENANCE CONTRACTS

490.0483 Repair Parts Purchased for Warranty Repairs. Parts and materials furnished in connection with the performance of mandatory warranties are regarded as sold to the customer as part of the original sale and may be purchased for resale. Parts and materials furnished in connection with the performance of optional warranties are regarded as consumed by the seller. If the seller purchases parts and materials which may be sold or may be consumed and it is unknown at the time of purchase which will be sold, the seller may purchase all such parts and materials for resale. Tax will be due when parts and materials are withdrawn from inventory for consumption. However, parts properly purchased for resale and thereafter used outside the state on optional warranties are not subject to tax pursuant to section 6009.1. If the parts used on optional warranties are of a kind which may not be purchased for resale, the sales tax is applicable to sales to the warrantor notwithstanding that some of the parts may be used outside the state. The warrantor may not issue a resale certificate for such parts. 4/27/94.