490.0727 Software/Hardware Service Agreement under Warranty. The taxpayer provides its customers with services for the sale of networked computer products, including workstations, servers, software and microprocessors, after the expiry of the original product warranty, after the expiry of the warranty warranty. Guaranteed support services are provided through a four-step program. Each level of support is sold at a single price and offers customers bundled hardware maintenance, operating system extensions, and specific phone/online support, including fixes and enhancements. Many retailers sell warranties or maintenance contracts with products such as cars, computers, and local electrical appliances. This publication explains how sales and use tax is applied if you sell a warranty or maintenance contract (sometimes referred to as a „service plan”) or if you perform a repair covered by such an agreement. A separate fee for an optional software maintenance contract is taxable at 50% if the retailer makes physical products, such as, available to the buyer. B software updates on a CD, during the term of the contract. However, if the retailer does not transfer physical updates of software or other personal tangible effects to the customer during the period covered by the maintenance contract, the contract fee is not taxable. For example, your electronics store sells a new computer for $1500 to a consumer. The price includes a one-year parts and work warranty, supported by the manufacturer. Your total tax of 1,500 USD is taxable.
490,0510 200 car warranty – $100 deductible. When a new car warranty is subject to a deductible clause of 100 $US, the deductible of 100 $US is taxable according to the ratio between parts and work. 15.05.90. On the other hand, if the guarantee is optional, the body engaged under the guarantee is the consumer of the boat. The sale to that person, whether the seller or the manufacturer, is the taxable retail sale. 490.0700 service protection contract. A separate fee for a service protection contract, which is in fact a guarantee of optional work and parts, does not constitute taxable gross revenue from the initial sale of an appliance. 5/10/60. 490.0820 Trade-In-Allowance. A battery with a 24-month warranty is purchased for $20 plus 60¢ in taxes. The battery fails at the expiration of 12 months.
The customer returns the defective battery worth $1 as garbage and receives an allowance of 10 $US. A new battery is sold to the customer for $10 plus 30H of taxes. In calculating gross receipts, the retailer should consider the value of the junk food from the defective battery of US$1 as an exchange discount and the remaining $9 as compensation for defective merchandise….