Director's Rule 5-275

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Installing, cleaning, repairing or otherwise altering or improving personal property of consumers

(1) Retailing. Persons installing, cleaning, constructing, imprinting, decorating, beautifying, repairing or otherwise altering or improving tangible personal property of or for consumers are taxable under the retailing classification upon the gross proceeds received from the performance of such activities upon tangible personal property.

The following illustrates activities conducted upon tangible personal property which are taxable under the retailing classification:

(a) Laundering, dyeing and cleaning;

(b) Boat repairing;

(c) Shoe repairing and shining;

(d) Altering or repairing wearing apparel;

(e) Automobile repairing, washing and painting;

(f) Cleaning or repairing tangible personal property which is or has been attached to real property such as oil tanks, septic tanks, sewer systems, and sewer lines;

(g) Repairing of any tangible personal property, such as computers, radios, home appliances, machinery, watches, jewelry, and other items; and

(2) Wholesaling. Persons rendering any of the above activities for persons other than consumers are taxable under the wholesaling classification upon the gross proceeds of sales received for each such activity. Sales to persons of materials, which are resold as a part of an article of tangible personal property being repaired, altered or improved, are taxable under the wholesale classification. Therefore, upon the purchaser giving a resale certificate to the seller, the seller's gross proceeds from the following sales would be taxable under the wholesale classification:

(a) Sales of parts or paint to an automotive repairman;

(b) Sales of lumber, chandlery, etc., to a boat repairman;

(c) Sales of shoe findings, thread, nails, polish and dyes to a shoe repairman; and

(d) Sales of solder, wire, condensers, etc., to a radio or television repairman.

(3) Taxpayers subject to this rule must include within the gross proceeds of sales all charges for activities conducted upon such tangible personal property and all charges representing expenses recovered in connection with such activities, such as transportation, hotel, and restaurant, charges, etc.

(4) Persons residing outside of Seattle may ship articles of tangible personal property into Seattle to be repaired, cleaned or otherwise altered, and thereafter returned to them. The retailing business license tax applies to charges made for the labor and/or the materials used in the repair, cleaning or altering activities, and no interstate deduction is allowed.

(5) For taxability of warranties and maintenance agreements see Seattle Rule 5-133.

DIRECTOR'S CERTIFICATION
I, Dwight D. Dively, Director of the Department of Finance of the City of Seattle, do hereby certify under penalty of perjury of law, that the within and foregoing is a true and correct copy as adopted by the City of Seattle, Department of Finance.

Effective May 15, 2007