California Taxpayer Liable for Use Tax on Repair Parts Used for Out-of-State Customers

The California Office of Tax Appeals (OTA) held that a taxpayer is liable for use tax on parts used to repair equipment in California for out-of-state customers. The taxpayer is a distributor, retailer and repairer of endoscopes and other medical devices. The taxpayer offered optional lump-sum maintenance contracts with the sale of its products and provided the materials, parts and labor for warranty repairs free of charge.

Source: salestaxinstitute.com

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