Section R15-5-2330. Tangible Personal Property Used in Conjunction with Warranty or Service Contracts or Provisions

A.      For purposes of this rule, the following definition applies: “Covered” means covered as defined in R15-5-138 for tangi- ble personal property under a warranty or service contract, or covered as defined in R15-5-137 for tangible personal prop- erty under a warranty or service provision.

B.       A warrantor or service person is subject to use tax on the cost of covered tangible personal property that is purchased for resale but subsequently taken out of inventory and used in the servicing of a warranty or service contract.

C.      Tangible personal property that is covered under a warranty or service contract and used in the servicing of the contract is subject to use tax unless transaction privilege tax was paid when the tangible personal property was acquired or the tangi- ble personal property is otherwise statutorily exempt.

D.      Tangible personal property that is covered under a warranty or service provision and used in the servicing of the provision is not subject to use tax as the transaction privilege tax was paid when the tangible personal property was acquired.

Historical Note

Adopted effective September 3, 1978 (Supp. 78-6). For- mer Section R15-5-2330 renumbered to R15-5-2343, new Section R15-5-2330 adopted effective September 29,

1993 (Supp. 93-3). Amended by final rulemaking at 13

A.A.R. 679, effective April 7, 2007 (Supp. 07-1).