Ga. Comp. R. & Regs. R. 560-12-2-.37 - Fabrication of Tangible Personal Property

(1) An operation which restores a used or worn piece of tangible personal property to its original state is a service and charges for labor in repairing such property are not taxable when billed separately to the customer. An operation which changes the form or state of the property is one of fabrication.

(2) Persons regularly engaged in the fabrication or production of tangible personal property for sale at retail shall collect and remit the tax on the sales price of such property. When the fabricator converts such property to his own use, he shall remit the tax based on the fair market value thereof at the time of its first use by him.

(3) The tax applies to the total charge for the fabrication or production of tangible personal property on a special order for a consideration. For example, if a manufacturer orders a part for machinery from a machine shop, the tax shall be collected on the total charge for the part, including labor, although charges for labor may be segregated from the cost of the materials.

(4) The tax applies to the charges for the fabrication of tangible personal property for users or consumers who furnish, either directly or indirectly, the materials used in the fabrication work. For example, the tax would apply to charges made by a tailor who makes an article of wearing apparel from material furnished by the customer. (Also see Rule 560-12-2-.88)

Notes

Ga. Comp. R. & Regs. R. 560-12-2-.37

Ga. Code Ann. Secs. 92-3438a, 92-8405, 90-8406, 92-8409, 92-8427.

Original Rule entitled "Fabrication of Tangible Personal Property" adopted. F. and eff. June 30, 1965. Amended: F. Jan. 13, 1975; eff. Feb. 2, 1975.