Georgia Taxes Refurbished Replacement Parts

Friday, February 20th, 2015

An image of car parts.

The Georgia Department of Revenue ("Department") released a letter ruling discussing the taxability of refurbished replacement parts.

The taxpayer sold equipment with optional maintenance agreements to customers. Under these agreements, the taxpayer would replace worn, obsolete, or defective equipment parts with new or refurbished parts. The taxpayer refurbished these used parts into replacement parts for other customers. The taxpayer asked whether tax was due on these refurbished parts.

Georgia taxes retail sales of tangible personal property. "Sale" means any transfer of title or possession in any manner in exchange for something of value. "Retail sale" means a sale for any purpose other than resale. "Resale" means a sale for the purpose of reselling property to consumers. If a purchaser does not pay sales tax at the time of purchase, use tax is due upon the first instance of use.

The refurbished replacement parts were taxable because they were acquired in a retail sale. The parts became the taxpayer's property in exchange for replacement parts. This was a sale. The taxpayer did not resell the parts; it repaired them for reuse. Because this was not a sale for resale, it was a taxable retail sale.

About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at or call 866.578.8193.

Economic Nexus in Washington

Monday, August 13th, 2018 -Effective October 1, 2018, certain out-of-state businesses will be required to collect and pay Washington sale...

Economic Nexus in Michigan

Thursday, August 9th, 2018 -Effective October 1, 2018, certain out-of-state sellers will be required to collect and pay Michigan sales or ...

Georgia Suspends Tax on Jet Fuel

Wednesday, August 8th, 2018 -Effective August 1, 2018, Georgia no longer collects state level sales and use tax on jet fuel. Georgia tax...

Employment Services Contracts for Permanent Employees Not...

Monday, August 6th, 2018 -The Ohio Board of Tax Appeals recently addressed whether contracts entered into by an employment services agen...

Alarm Systems and Monitoring Not Taxable in Missouri

Wednesday, August 1st, 2018 -The Missouri Department of Revenue recently released a ruling determining that (1) security, fire, tornado, an...

Economic Nexus in Utah

Wednesday, August 1st, 2018 -Effective January 1, 2019, certain out-of-state sellers will be required to collect and pay Utah sales or use ...