Services subject to tax — Dry cleaning and laundry services and industrial laundry services

(a)(1) The gross proceeds or gross receipts derived from the sale of the following services are subject to sales tax:

(A) Dry cleaning services;

(B) Laundry services; and

(C) Industrial laundry services.

(2) These services shall be defined as follows:

(A) “Cloth or fabric” shall include, but not be limited to, items such as:

(i) Clothing;

(ii) Garments;

(iii) Uniforms;

(iv) Wedding dresses;

(v) Linens;

(vi) Draperies;

(vii) Tablecloths;

(viii) Rugs;

(ix) Towels; and

(x) Products that consist at least partially of cloth or fabric, such as door mats with a rubber base;

(B) “Dry cleaning services” shall mean the cleaning of leather, cloth, or fabric with any and all dry cleaning solvents, including the ironing, pressing, folding, or starching of dry cleaned leather, cloth, or fabric;

(C) “Industrial laundry services” shall mean the washing of cloth or fabric with water, including the ironing, pressing, folding, or starching of washed cloth or fabric, by laundry businesses that service commercial accounts; and

(D) “Laundry services” shall mean the washing of cloth or fabric with water, including the ironing, pressing, folding, or starching of washed cloth or fabric.
(b)(1) The gross proceeds or gross receipts attributable to the following services are not subject to sales tax provided they are itemized and separately stated on the invoice provided to the customer:

(A) Repairs;

(B) Alterations; and

(C) The treatment of cloth or fabric with chemicals that provide waterproofing or protection from staining or soiling.

(2) However, if these services are provided along with taxable dry cleaning or laundry services and are not itemized and separately stated on the invoice to the customer, the total gross proceeds or gross receipts charged to the customer will be subject to sales tax.

(c) The gross proceeds or gross receipts derived from self-service, coin-operated clothing washing and drying machines or self-service, coin-operated dry cleaning machines are not subject to sales tax.
(d)(1) Any hotel, motel, nursing, retirement, or convalescence facility, or other provider of accommodations that bills its guests or residents a specific charge for dry cleaning or laundry services must collect tax on the gross proceeds or gross receipts for the dry cleaning or laundry services.

(2) However, the gross proceeds or gross receipts derived by a charitable, nonprofit nursing, retirement, or convalescence facility from dry cleaning or laundry services provided by such facility to its residents are not subject to tax.
(e)(1) Long-term rentals of uniforms, linens, towels, mats, and similar items are not subject to the tax on the service of industrial laundry.
(2)(A) The purchaser of the items for long-term rental must elect to pay the tax at the time of the purchase of the items or collect tax on subsequent long-term rentals of the property.

(B) See 26 CAR § 30-1002.
(f)(1) Items that are used or consumed in performing dry cleaning and laundry services may not be purchased tax exempt.

(2) This includes, but is not limited to:

(A) Uniforms;

(B) Machines;

(C) Equipment;

(D) Detergent;

(E) Dry cleaning solvents;

(F) Bleach;

(G) Powder; and

(H) Starch.

(3) Such items are subject to state and local gross receipts or use tax when purchased for use by the service provider.