Advice has been requested regarding the application of sales and use tax on warranties, guarantees, and service and maintenance agreements that covers fixtures and other personal property and the taxability of parts and materials used to repair a fixture covered under an agreement. Household and commercial hot water heaters, garbage disposals, central heating and air conditioning systems, central vacuum systems, and 2. If a warranty, guarantee, service or maintenance agreement covers both fixtures and nonfixtures without separate amounts being listed on the billing invoice, then the total charge for the agreement is taxable. If separate amounts are listed on the billing invoice, only those charges for the agreement covering nonfixtures are taxable. Under Sales and Use Tax Regulation 1-074 sales and use tax does not apply to parts and materials used, and services performed in fulfilling the obligations under an agreement to repair or replace nonfixtures provided, there is not a separate charge for the parts and materials.
Persons repairing fixtures are contractors.
The parts and materials that are used to replace or repair a fixture are taxable even when the agreement has been taxed.