City and County of Denver, Colorado
Topic No. 44
INTERMINGLED SALES AND SERVICE
Charges for labor or services used in installing, applying, remodeling, or repairing tangible personal property sold are allowable deductions from the taxable sale if the sale of tangible personal property and non-taxable services are billed separately on the invoice to the consumer. However, if no separation is made, the sales tax applies to the total amount of the sale. (See related Tax Guide Topic - Rentals and Service Charges Combined.)
Business enterprises which perform service contracts (including some maintenance and construction contractors) are subject to sales or use tax on tangible personal property used or consumed in Denver while performing their services. (See related Tax Guide Topics - Maintenance Contracts and Construction Contractors.)
1. Joe's Garage performs oil changes and invoices their customers for $19.95: $11.95 for oil and the oil filter, and $8.00 for labor. Joe's Garage is required to collect sales tax on $11.95 from their customers.
2. Bob's Garage charges a flat $19.95 for a standard car oil change. Bob's Garage must collect sales tax on $19.95 from their customers.
RELATED TAX GUIDE TOPIC
Rentals & Service Charges Combined
* DRMC Section 53-24(16). Definitions.
* DRMC Section 53-25(1). Imposition of tax.
* DRMC Section 53-95(17). Definitions.
* DRMC Section 53-96(1). Imposition of tax.
THE ABOVE INFORMATION IS A SUMMARY IN LAYMAN'S TERMS OF THE RELEVANT DENVER TAX LAW FOR THIS INDUSTRY OR BUSINESS SEGMENT. IT IS NOT INTENDED FOR LEGAL PURPOSES TO BE SUBSTITUTED FOR THE FULL TEXT OF THE DRMC AND APPLICABLE RULES AND REGULATIONS.