ARSD § 64:06:02:58 — Repair services

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64:06:02:58. Repair services. All charges for repair
services, including maintenance agreements, are subject to sales tax. Repair of
personal property or any product transferred electronically is a service in
which property is restored to or near its former condition or usefulness. A
person engaged in the repair business must have a sales tax license and report
tax on the gross receipts.
Items purchased by a repair person
which become part of the repaired property may be purchased exempt from sales
tax by the repair person. The charges to the customer for the parts and service
are taxable. Tools, equipment, and supplies consumed by a repair person are
subject to sales tax when purchased. A business is liable for use tax on all
items of tangible personal property and any product transferred electronically
used by the business even though an item may have been especially fabricated to
produce a product for a particular customer, is completely consumed in
completing the customer's order, and the cost of the item is included in the
charge to the customer.
A person who occasionally does some
repair work but does not hold out to the public that the person does repair
work is not considered to be in a repair business subject to sales tax.