Mississippi Administrative Code
Title 35 - Department of Revenue
Part 4 - Sales and Use Tax
Subpart 11 - Transportation
Chapter 02 - Automobile, Truck and Truck-Tractor Dealers
Section 35-4-11-02-300 - Service Contracts
Section 35-4-11-02-301

The sale of a contract to provide for maintenance and/or repairs of a motor vehicle is exempt from sales tax when sold either with the vehicle or separate from the sale of the vehicle. These contracts are known in the industry as either a service contract, extended warranty or other similar names and are separate from the original new car warranty as provided by the manufacturer. Income received from the subsequent repair work performed by the dealer under the provisions of these contracts is taxed at the regular retail rate of tax.