Indiana: Sales Tax Handbook
Are Optional Maintenance Contracts subject to sales tax?
While Indiana's sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. This page describes the taxability of optional maintenance contracts in Indiana, including parts purchased for use in performing service under optional maintenance contracts. To learn more, see a full list of taxable and tax-exempt items in Indiana.
General Optional Maintenance Contracts
TAXABLE
In the state of Indiana, maintenance contracts are considered to be taxable so long as there is a reasonable expectation that tangible personal property will be provided.
Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts
EXEMPT
Sales of parts purchased for use in performing service under optional maintenance contracts are exempt from the sales tax in Indiana.
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