Fabrication

# A.

An operation which changes the form or state of tangible personal property is fabrication. Fabrication is distinguished from repair which is an operation that restores a used or worn piece of tangible personal property. Charges for repair are governed by 23VAC10-210-3050.

# B.

A person regularly engaged in the fabrication of tangible personal property for sale at retail must collect and pay the tax on the sales price of the property. If the fabricator converts some of the property to his own use, he must pay the tax based on the fabricated cost (i.e., the cost to him) computed by totaling the cost of materials, labor and overhead charged to work in process. Freight inward to the plant on the materials is treated as an element of the cost of materials.

A fabricator who fabricates tangible personal property principally or primarily for his own use or consumption and not principally or primarily for sale or resale (e.g., as a contractor) is not entitled to any of the production exemptions set out in 23VAC10-210-920.

The tax applies to the total charge for the fabrication of tangible personal property on a special order for a consideration, including labor, even if charges for labor are separately stated.

The tax applies to the charges for the fabrication of tangible personal property for users or consumers who furnish, either directly or indirectly, the materials used in the fabrication work. For example, a tailor who makes an article of wearing apparel from materials furnished by the customer must collect and pay the tax on the charge for making the apparel.

For fabricators who are industrial manufacturers, see 23VAC10-210-920; for fabricators who are also real estate construction contractors, see 23VAC10-210-410; for repairs, see 23VAC10-210-3050.