In a recent letter ruling, the New Jersey Division of Taxation (Division) addressed the taxability of dog-related services. The Division determined that dog training services were not subject to tax, that dog sitting services were sometimes subject to tax, and that sales of trained dogs were subject to tax.
The taxpayer sold dog training services, dog sitting services, and fully trained dogs. The training and sitting services could take place either at the taxpayer's facilities or at the client's home.
New Jersey taxes sales of tangible personal property and specifically identified services. New Jersey does not generally tax professional services. Taxable services include the storage of tangible personal property not held for sale. Dogs are tangible personal property.
The Division held that dog training was not taxable because New Jersey did not specifically identify training as a taxable service. It was therefore a non-taxable professional service.
Dog sitting services, however, were taxable if they took place at the taxpayer's facility. Because dogs are tangible personal property, dog boarding or "day care" services were taxable storage services. Dog sitting at the client's home, however, was a non-taxable professional service.
Sales of trained dogs were subject to tax as sales of tangible personal property. Separately stated charges for training were subject to tax. Although training services are generally not subject to tax, the training services here were part of the sales price of the dog. Because the sale of the dog was taxable, the charges for the training were also taxable.