Nevada – Taxability of Manufacturer Warranties and Goodwill Repairs

SALT Report 1812 – In the latest issue of Nevada Tax Notes, the Nevada Department of Taxation discusses the taxability of manufacturer’s extended warranties and goodwill repairs.  Nevada Law NAC 372.460 states that “the sale of tangible personal property by a retailer includes the furnishing of replacement parts or materials to repair or replace tangible personal property pursuant to the provisions of a warranty or guaranty included in the contract of sale.” Therefore, sales and use tax does not apply to the purchase and use of replacement parts or materials by a retailer if they are purchased to repair or replace tangible personal property provided for in the original warranty or guaranty.

Additionally, manufacturers and retailers cannot exempt any goodwill or promotional use of tangible personal property used to replace or repair tangible personal property after the original warranty has expired because these services were not included in the original sale contract.

For Further Information:

Nevada Department of Taxation – Nevada Tax Notes Issue 180