Current through Register Vol. 48, No. 12, March 22, 2024
a) Persons Who
Service or Repair Tangible Personal Property - When Liable For Retailers'
Occupation Tax
1) When persons who service or
repair tangible personal property sell tangible personal property to purchasers
for use or consumption apart from their rendering of service, they incur
Retailers' Occupation Tax liability. This is the case, for example:
A) Where a repairman sells repair parts
"over-the-counter" to a purchaser for use or consumption without any obligation
on the part of the repairman to install such parts for the purchaser;
B) where a repairman repairs, rebuilds or
reconditions property which belongs to himself and then sells such property to
a purchaser for use or consumption apart from his rendering of service as a
repairman;
C) where a repairman
sells accessories (with or without installation), to purchasers for use or
consumption;
D) where a repairman
or other person engaged in a service occupation sells, "over-the-counter", to
purchasers for use or consumption, apart from the rendering of service, such
items as lubricants, grease, paint, wax, polish, lacquer, solder, materials for
patching or repairing tires, and other tangible personal property;
and
E) where a repairman
manufactures and sells retread tires, whether or not the tire casing is
provided by the purchaser. (But, see subsection (d)(2) of this Section
regarding the patching of tires. Also see Section
130.330(d)(3)(G)
of this Part for information regarding the
Manufacturing Machinery and Equipment Exemption on retreading machinery and
equipment.)
2) These
principles apply to persons who repair or otherwise service every type of
tangible personal property.
b) Examples of Accessories
1) In the case of automobiles, the term
"accessories" includes, but is not limited to, the sale of such items of
tangible personal property as gasoline, motor oil, alcohol and other antifreeze
solutions, ash trays, batteries, cigar or cigarette lighters, clocks, heaters,
radios, seat covers, seat cushions, tires, inner tubes and the like. (But, see
subsection (d)(1) regarding repairs to, and servicing of,
automobiles.)
2) In the case of
furniture, slip covers are considered to be accessories, rather than repair
parts or repair materials. For further information concerning slip covers, see
Section
130.2140
of this Part.
c) Persons
Who Service or Repair Tangible Personal Property - When Not Liable For
Retailers' Occupation Tax
1) Persons who
engage in the business of repairing tangible personal property belonging to
others (including, but not limited to, automobile repairmen, farm implement
repairmen, furniture upholsterers and repairmen, garment repairmen, machinery
repairmen, radio repairmen, refrigerator repairmen, shoe repairmen, tire and
tube repairmen, and watch, clock and jewelry repairmen) are engaged in a
service occupation. To the extent to which they engage in such service
occupation, they are not engaged in the business of selling tangible personal
property to purchasers for use or consumption. Consequently, they are not
required to remit Retailers' Occupation Tax measured by any of their receipts
from engaging in such service occupation, including receipts from both labor
and tangible personal property.
2)
In addition to persons who repair tangible personal property belonging to
others, this exemption also applies to persons who perform upon tangible
personal property, which belongs to their customers, such services as cleaning,
dyeing, greasing, laundering, painting, polishing, waxing, welding and other
services.
d) Examples of
Repair Work
1) The repairing of automobiles
includes, but is not limited to, the replacement of parts, such as brake
fluids, brake linings, carburetors, fan belts, fans, fenders, lights, gaskets,
points, spark plugs, valves, windshield wipers and the like. This includes
services such as changing oil and replacing antifreeze. (But, see subsection
(b)(1) regarding the sale of automobile accessories.)
2) The repairing of tires or inner tubes
includes services such as patching or plugging. (But, see subsection (a)(1)(E)
regarding retread tires.)
3) The
repairing of shoes includes, but is not limited to, the replacement of such
parts as heels, soles and the like by repairmen as a part of the repair
work.
4) The repairing of watches
and clocks includes, but is not limited to, the replacement of such parts as
hands, springs and the like by repairmen as a part of the repair
work.
5) The repairing of jewelry
includes, but is not limited to, the sizing of rings and the soldering together
of broken pieces of jewelry.
6) The
repairing of radios includes, but is not limited to, the replacement of such
parts as condensers, dials, radio tubes, volume controls and the like by
repairmen as a part of the repair work.
7) The repairing of refrigerators includes,
but is not limited to, the replacement of such parts as electric motors,
refrigerator doors and the like by repairmen as a part of the repair
work.
8) The repairing or
upholstering of furniture includes, but is not limited to, the transfer of such
items as glue, nails, paint, tacks, upholstering materials, varnish, wax and
the like by furniture upholsterers and repairmen as a part of the repair
work.
9) The repairing of garments
includes, but is not limited to, the transfer of such items as buttons,
collars, cuffs, fabrics, fur pieces, linings, thread and the like by repairmen
as a part of the repair work.
e) Cross Reference to Service Occupation Tax
Regulations
Personal property repairmen and other servicemen referred to
in this Section, though not liable for Retailers' Occupation Tax on their
repair receipts, are liable under the Service Occupation Tax Act when they
transfer tangible personal property, incident to sales of service (see Subpart
A of the Service Occupation Tax Regulations, 86 Ill. Adm. Code
140).