As an information technology repair business for restaurants and retail, should I be charging sales tax?

by Paul S. Carpenter, CPA | Oct 18, 2018
askacpaicon

For Pennsylvania sales tax purposes, fees for labor are taxed when the labor is expended on a taxable item, i.e., repairs to a vehicle. (The vehicle was a taxable item, hence labor to repair it is taxable.) This would also apply to appliances, jewelry, and all other taxable items. So, the logic that follows is if the item you are repairing was subject to sales tax when it was purchased -- and all computer and information technology equipment is subject to Pennsylvania sales tax -- then the labor to repair that equipment is also taxable.

For Pennsylvania sales tax purposes, fees for labor are taxed when the labor is expended on a taxable item, i.e., repairs to a vehicle. (The vehicle was a taxable item, hence labor to repair it is taxable.) This would also apply to appliances, jewelry, and all other taxable items. So, the logic that follows is if the item you are repairing was subject to sales tax when it was purchased – and all computer and information technology equipment is subject to Pennsylvania sales tax – then the labor to repair that equipment is also taxable.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Paul S. Carpenter, CPA, is president of Carpenter Capital Advisors in Johnstown, Pa.

 
Disclaimer
The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
Financial FAQs

Search the most frequently asked finance and accounting questions and read the responses from PICPA members. Always consult a CPA before taking action.

Search