Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
490.0000 RETURNS, DEFECTS AND REPLACEMENTS—Regulation 1655
(2) Warranty Charges—When Includable In Tax Measure
490.0660 Service Guarantees on Automobiles. The sale of automobile guarantees as a part of the sale of the automobile it warrants should be treated for tax purposes in the same manner as are television warranties, that is, any amount charged for the warranty should be included in the taxable measure. However, when the warranty is sold on a strictly optional basis, the tax does not apply. The sale of parts by the repairman to the guarantor are considered as being made to a consumer and therefore taxable. 7/18/57.