Tenn. Comp. R. & Regs. 1320-05-01-.04 - ADJUSTMENTS, REPLACEMENTS, AND WARRANTIES

(1) When an item of tangible personal property, or any part thereof, is returned to a dealer pursuant to a sales, warranty, or guarantee agreement for repair or replacement, and no charge is made to the customer for the repair or replacement, there is no Sales or Use Tax due. In the event any charge for labor or a part or parts is made to a customer for the repair or replacement, the charge that is actually made to the customer is subject to the Sales or Use Tax.

(2) Dealers buying and using tangible personal property to fulfill sales, warranty, or guarantee obligations to a customer may purchase and use the tangible personal property without the payment of any Sales or Use Tax.

Notes

Tenn. Comp. R. & Regs. 1320-05-01-.04

Original rule certified June 7, 1974.

Authority: T.C.A. §§ 67-3045 and 67-101.