How are extended warranties and discounts handled on computers when they bring the purchase price over $1,500?
The purchase of a computer will be exempt if the sales price is $1,500 or less, but any extended warranty purchased would not be exempt. Extended warranties are considered taxable services, and services are not exempt under the sales tax holiday. Also, if the vendor offers any kind of incentive that is reimbursed by a third party, such as a manufacturer’s rebate, that brings the price you pay to under $1,500, the original sales price of the computer before application of the reimbursable incentive will be the price that determines tax application. In other words, if you purchase a computer that normally sells for $1,800 but the vendor offers a $300 manufacturer’s rebate that brings the price you pay to $1,500, the $1,800 original sales price will be the price that determines taxability. In this case, because the actual sales price exceeds $1,500 (the $1,800 sales price with the reimbursable rebate), the computer will remain subject to tax. However, if the seller offers a store discount
Related Questions
- Can a unit purchase extended warranties or damage protection plans? For example, if I buy a printer for $400 and I can get a three-year extended warranty for an additional $99, is it legal to do so?
- Does PC Outreach charge a purchase price or other fees to the families and/or individuals to whom it provides computers?
- How are extended warranties and discounts handled on computers when they bring the purchase price over $1,500?
