Warranties and maintenance agreements.Warranties and Maintenance Agreements • August 3rd, 2022
WARRANTIES and MAINTENANCE AGREEMENTSWarranties and Maintenance Agreements • November 11th, 2021
A manufacturer’s initial warranty generally provides for the repair or replacement of defective property or parts while the product is under warranty at no charge to the purchaser. This warranty is usually included in the purchase price paid for the property. Authorized dealers or repair agents subsequently remove property from inventory in order to replace the defective parts. This inventory, presumably purchased tax fee for resale, is not subject to additional sales/use tax because it was included in the taxable purchase price paid for the original product.
Warranties and Maintenance AgreementsWarranties and Maintenance Agreements • April 18th, 2011
This FYI addresses the sales tax obligations of vendors who offer warranties and maintenance agreements. For the purposes of determining Loveland sales tax applicability, there are two types of warranties for maintenance agreements (also referred to as service contracts): mandatory agreements that are part of the purchase price of the item, and optional agreements which are sold to the customer as a separate item.
