SALT Report 1201 – The South Carolina Department of Revenue has issued a reminder for taxpayers that as of September 1, 2011, the application of sales and use tax pertaining to warranty and maintenance contracts, and to the removal of parts for the repair of a defective product under these contracts, returns to the way it was prior to October 1, 2005.
Therefore, the sale of a warranty or maintenance contract remains taxable when purchased at the same time as the tangible personal property, unless the property is exempt. However, with few exceptions, a warranty or maintenance contract purchased after the tangible personal property will no longer be taxable.
This change is effective for all sales of extended warranty contracts occurring on or after September 1, 2011.
For Further Information: