Idaho Admin. Code r. 35.01.02.062 - REPAIRS SALE OF PARTS AND MATERIAL
Section 63-3612, 63-3613, 63-3622, Idaho Code
01.
In General. Repairs normally
require both material and labor. Persons engaged in the business of repairing,
renovating or altering tangible personal property owned by others are required
to collect sales tax upon the parts or material required in the repair or
renovation of the property. (3-31-22)
02.
Separate Statement of Parts or
Materials. The sales price of parts or materials need to be separately
stated and sales tax is charged on these parts or materials. Separately stated
repair labor is not taxable. If parts and materials are not separately stated
from the repair labor, the total amount for parts and repair labor is taxable.
(3-31-22)
03.
Repairs Covered
by Insurance Benefits. Repairs, the costs of which are covered by
insurance benefits, are treated the same as otherwise described in this rule.
Sales tax is to be collected on the parts and materials. Separately stated
repair labor is not taxable. (3-31-22)
04.
Incidental Material. In some
instances, because of the small amount of materials used in a repair job, the
value of the material may be insignificant to the entire repair cost. For
example, incidental amounts of material are sometimes used in repairs made to
tires, clothing, watches, and shoes. If materials such as buttons, thread,
watch parts, tire valve cores and stems are incidental to the repair they will
be taxed when purchased by the repairman. Other examples of materials which are
incidental to repairs are touch-up paint and soldering materials used in car
repairs. Materials are incidental if they have a value which is insignificant
and for which a reasonable retail sales price cannot be readily determined.
(3-31-22)
05.
Shop
Supplies. Dealer/repair shops should not charge sales tax on shop
supplies that are consumed during the repair, such as spray bottles, buffer
pads, towels, masking tape, solvents, sandpaper, and other items that have no
specific identifiable value billed to the customer and which do not become a
part of the item being repaired. These supplies are taxable when purchased by
the dealer/repair shop and should not be included as part of the taxable amount
billed to the customer. (3-31-22)
06.
Repairs Versus Fabrications.
Repairs and renovations to tangible personal property must not be confused with
fabrications of tangible personal property. Fabricated tangible personal
property is subject to sales tax on the entire price whether the parts and
materials are separately stated or not. See Rules
011 and
029 of these rules.
(3-31-22)
07.
Parts for
Resale. When a repair shop buys parts that will be resold to its
customers or an auto dealer buys parts to install in a car which is being
reconditioned for sale, they should not pay tax to the supplier if they provide
the documents required by Rule
128 of these rules.
(3-31-22)
Notes
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