Sales tax on labor

[kup]

Does IN charge sales tax on labor? I have a window contractor charging me 7% SALES tax on labor and this is the first time I remember being taxed on labor. I live in Porter county and the contractor is from South Bend.

TIA
kup

 

[4sarge]

Does IN charge sales tax on labor? I have a window contractor charging me 7% SALES tax on labor and this is the first time I remember being taxed on labor. I live in Porter county and the contractor is from South Bend.

TIA
kup

Unfortunately, Yes

 

[kup]

found this

1. Delivery and Installation Charges. Delivery and installation charges are now included in the definition of “gross retail income” and are therefore subject to tax. If an appliance store delivers a refrigerator to your home, the delivery charge is subject to tax. Likewise, if an automotive service shop installs a new stereo system in a vehicle that did not have a stereo, the installation charge is subject to tax. However, delivery and installation charges are not subject to tax when the charges are related to nontaxable items or exempt transactions.
2. Repair and Replacement Charges. Unlike delivery and installation charges, repair and replacement charges are not taxable. Repair charges are charges to restore an item so that it can be used for its original purpose while replacement charges are charges for replacing an item that is part of another item of tangible personal property. For example, if an automotive service shop repairs your vehicle after an accident by replacing your fender, the fender is taxable, but the labor to repair the fender is not.

Being they are repairing/replacing windows that are rotted I dont think they should be charging sales tax on the labor.

I found this on a lawyers web site and not the IN .gov site , still looking.

THANKS
kup

 

[10ring]

Currently, Indiana imposes the sales tax only on three types of “services”:

(a) services that are part of “unitary transactions” where both goods and services are sold for a combined charge;

(b) services that prepare, fabricate, modify, complete or deliver a product before its transfer to a customer, where those services are separately charged and stated

; and (c) various kinds of utility and telecommunications services that have been defined by statute as kinds of “tangible personal property” and therefore subject to the sales tax.

They will find a way to charge tax on all services in the future, I'm sure. It's already been proposed I think.

 

[4sarge]

1. Delivery and Installation Charges. Delivery and installation charges are now included in the definition of “gross retail income” and are therefore subject to tax. If an appliance store delivers a refrigerator to your home, the delivery charge is subject to tax. Likewise, if an automotive service shop installs a new stereo system in a vehicle that did not have a stereo, the installation charge is subject to tax. However, delivery and installation charges are not subject to tax when the charges are related to nontaxable items or exempt transactions.
2. Repair and Replacement Charges. Unlike delivery and installation charges, repair and replacement charges are not taxable. Repair charges are charges to restore an item so that it can be used for its original purpose while replacement charges are charges for replacing an item that is part of another item of tangible personal property. For example, if an automotive service shop repairs your vehicle after an accident by replacing your fender, the fender is taxable, but the labor to repair the fender is not.

Being they are repairing/replacing windows that are rotted I dont think they should be charging sales tax on the labor.

I found this on a lawyers web site and not the IN .gov site , still looking.

THANKS
kup

My answer is still yes. Call a competitor and or the Indiana Internal Revenue Service and ask what the law is and if you still don't want to pay, ask the vendor to discount the windows the tax amount to seal the deal

 

[dblagent]

Some states consider computer services taxable, Indiana does not. Do not know about other types of labor, but computer labor is not taxable.

 

[AllenM]

We don't charge tax on labor just parts.

 

[Soundslikejosh]

When I was still in the trade a couple years ago, no tax was paid on labor.