HAR § 18-237-13-06.11 — Tax on service business; tire recapping services

(a) This section applies to the gross income derived from recapping a tire belonging to another person. (b) When recapping services are rendered upon the order of or at the request of another taxpayer who is engaged in the service business and who in fact acts or acts in the nature of an intermediary between the person rendering such services and the ultimate recipient of the benefits of services: (1) The gross income of the recapper takes the rate of one-half of one per cent; (2) The gross income of the intermediary takes the rate of four per cent. (c) When recapping services are rendered upon the order or request of another person who is not an intermediary within the meaning of subsection (b), the gross income of the recapper takes the rate of four per cent. Example 1: A customer takes a tire to service station operator (taxpayer S) for recapping. Taxpayer S in turn has the tire recapped by taxpayer R. Taxpayer R (tire recapper) is subject to a general excise tax of one-half of one per cent on the amount received from taxpayer S for the recapping services rendered. Taxpayer S is subject to the general excise tax of four per cent on the amount received from the customer. Example 2: A customer takes a tire to the tire recapper (taxpayer R) for recapping. Taxpayer R is subject to the general excise tax rate of four per cent on the amount received from the customer for the recapping services rendered.