Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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495.0000 SALE

Annotation 495.0415


495.0415 Replacing Truck Parts—No Cost to Customer. A truck repair shop made a mistake by not putting oil in the transmission before the truck left the shop. This destroyed the transmission. The shop bought a transmission for the customer and installed it in the truck at no charge to the customer.

The truck repair shop did not sell the transmission to its customer, but rather consumed it in repairing the damage the truck repair shop caused. Therefore, the sale of the transmission to the truck repair shop is subject to sales tax. If the truck repair shop used a transmission from its resale inventory, it must report and pay use tax on its purchase price with its return for the period in which the property was withdrawn from resale inventory for consumption. (Regulation 1668 (a)(2)). 7/11/96.