SALT Report 2972 – The New Jersey Division of Taxation issued a letter ruling regarding the application of sales and use tax to a certified trainer’s charges for dog training classes, dog sitting services, and sales of trained dogs.
In it’s response, the Department stated that under N.J.S.A. 54:32B-2(e)(4)(A) charges for teaching a professional dog training class are not subject to New Jersey sales and use tax whether the service is provided at a customer’s house or at the Taxpayer’s facility.
Likewise, charges for dog sitting services that take place at the customer’s home are considered exempt personal service transactions so long as any property that is transferred is inconsequential and not separately charged for. However, under N.J.S.A. 54:32B-3(b)(3) the Taxpayer must charge tax on its animal boarding and day care charges when these services are provided at the Taxpayer’s facility because the Taxpayer is charging for the safekeeping of the dog.
If the Taxpayer purchases dogs that will be trained and resold, it can do so without paying tax if it provides a resale certificate to the seller. However, the Taxpayer must charge tax when it sells the trained dog to a customer. This is because the Taxpayer is not selling training services; rather the Taxpayer is selling a trained dog. Therefore, tax is due on all charges for the training services whether or not the amount is separately stated from the price of the dog because the training services are considered part of the sales price of the dog.
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