QUESTION DETAIL
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What is the sales tax for labor charges in Minnesota for performing service work on site at a customers facility?
ANSWER
The BIDaWIZ Team's Answer:
Repair labor (exempt) Repair labor is restoring an item to its original condi-tion so it can be used for its original purpose. Repair labor is
not taxable if separately stated from the repair parts on the customer’s invoice.
Installation labor (taxable) Installation labor is setting an item into position or connecting or adjusting or programming it for use. Beginning January 1, 2002, if the item being sold is taxable, charges by the seller to install it are also tax-able. Installation charges are part of the sales price of the item, even if separately stated. Beginning July 1, 2002, installation charges by a third party became a taxable service if the installation would be taxable if provided by the seller of the taxable item. Examples of installation labor include installation of: • • • • • Fabrication labor (taxable) Fabrication labor is making, creating, or assembling a product or altering an existing product into a new or changed product. The total charge to the customer for materials and labor is taxable. Labor to • air conditioning systems • power locks • power windows • remote car starters • sunroofs, both pop-up and electric • tire siping • window defrosters • window tinting • other street rod and customized vehicle accessories Making keys for customers is taxable fabrication la-bor. If you perform fabrication labor in your business, re-fer to the following fact sheets for information relat-ing to additional exemptions and refunds available to you: Fact Sheet 145 - Industrial Production Fact Sheet 129 - Utilities Used In Production Fact Sheet 103 - Capital Equipment
If repair labor is not separately stated, the total amount of the repair is taxable, unless the value of the materials used to make the repair is insignificant (i.e., shop sup-plies).
