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Monday, May 22, 2017

First Installment of New Monthly Sales Tax Blog

Welcome to the first installment of our new monthly blog –

“What are the rules for NYS Sales Tax for my profession?”

Every month we will highlight another industry with a few of the broad guidelines to follow!  Our hope is not only to provide helpful information for the business owners but the consumers as well!

This month’s industry is: 

Image result for general auto repair photos

Auto Repair and Body Shops

What exactly is considered Auto Repair by NYS?  You might be surprised to know that it is not just repair of cars, it also includes repairs of trucks, RVs, snowmobiles, motorcycles, etc.  As a general rule sales tax must be collected on charges for parts and labor on repair services. If the shop also sells parts directly, for example oil, windshield wipers or fluids, those are also taxable. 

If a vehicle needs to be towed to the shop those towing services are taxable.  If you charge for the storage of the vehicle if it is in the shop long term that service is also taxable.

NYS Inspection fees are free from NYS sales tax!

If work is done under a warranty then the warranty company is charged directly. No sales tax is charged to the warranty company provided they give you form ST-120 Resale Certificate. If work is done under an insurance claim however, all work is charged sales tax to the insurance company the same as a consumer. 

If you purchase parts or supplies for a repair with the appropriate Resale Certificate, you are not required to pay sales tax on those purchases.  The supplies and parts must be directly used in the repair.  General shop supplies used on multiple repairs are not free from sales tax as they are not directly passed on to the consumer. 

Remember this is just a broad guideline and more research might be necessary for more complicated issues.