Appliance repair labor is generally not taxable in Indiana when the bill lists it on its own line, apart from the parts. So if the bill for your washer is on the kitchen table in Plainfield with a sales tax line on it, look at how it's laid out.
Parts are taxed. And one lump price for the whole job can be taxed in full.
That's how Sales Tax Information Bulletin #60 explains it. It comes from the Indiana Department of Revenue, the office that runs the state's sales tax, and the current version came out in March 2024.
One thing first. This guide explains what the bulletin says, and that's all it does. It isn't tax advice, so it can't tell you if your own bill is right.
Here's how the bulletin sorts a repair bill:
| What the bill shows | What the bulletin says |
|---|---|
| Labor and parts on separate lines | The labor is generally not taxed. The parts are |
| One price for labor and parts, and the part is 10% of it or less | The repair charge is exempt |
| One price for labor and parts, and the part is more than 10% of it | The whole repair charge can be taxed |
| A service call fee to come and find the problem | It depends on why the tech came and how the bill is set up: exempt in one state example, taxed in the other |
| A delivery charge to bring out a part the company knew you needed | Tied to the part, which is taxed |
| Something fixed to the house, like the bulletin's furnace | Contractor rules. In its one-price example, no tax was charged on the bill |
Do you charge tax on labor in Indiana?
Not on repair labor that's listed apart from the parts. The Department of Revenue treats a repair as a service, and Bulletin #60 says the charge for that service is generally exempt, which means no sales tax is due on it.
There's a condition, and it matters. The sure way is for the labor to be "separately stated," so it has its own line on the bill and its own price.
Read the exact wording
"Repair charges on tangible personal property are generally exempt as a charge for a service when separately stated from any materials used in the repairs. If the service charge is not separately stated, the entire transaction could be subject to sales tax if the materials are more than 10% of the overall charge, which would make it a taxable bundled transaction."
From Indiana Department of Revenue, Sales Tax Information Bulletin #60
The bulletin talks about "tangible personal property." That's its term for goods. In both of the state's washing machine examples, the washer counts as tangible personal property and not as a fixture. A fixture is a thing fixed to the house.
If you run a repair business
This guide is for the person paying the bill. It doesn't say how a business should charge, collect or file, and for that you'd read the bulletin itself and ask the Department of Revenue.
Are repairs taxable?
Partly, yes. The parts are taxed, and the labor isn't when it has its own line, even if the bill also lists a service call or a delivery charge.
It changes when the bill shows one price for the whole job.
When the bill is one lump price
A lump price can make the labor taxed too. The bulletin says the repair labor is taxed if the parts are more than 10% of the overall charge.
Ten percent is a low bar. On a $200 job, it's $20 of parts.
Read the exact wording
"Furthermore, if the delivery/transportation charge, service call, repair labor, and parts are separately stated, the repair labor would still be nontaxable regardless. If they are not separately stated, then the repair labor would be taxable if the parts are more than 10% of the overall charge."
From Indiana Department of Revenue, Sales Tax Information Bulletin #60
The state's washing machine examples
The bulletin doesn't leave it there. It walks through a washing machine repair twice, and the two examples show the 10% rule landing on each side of the line.
A cheap part. The tech came out on a $65 service call to find the problem. The company paid $10 for the part and charged one $100 fee for the repair, part and all. Ten dollars is 10% of $100, not more than 10%, so the repair charge is exempt. The $65 service call is exempt too. The company owes the tax on the part it used.
Read the exact wording
"The part cost $10 when the company bought it. The company charges a $100 fee for the repair, which is inclusive of the part. The repair charge is exempt because the cost of the part is 10% of the overall charge of the service. The $65 is also exempt, because the charge is not associated with the delivery of tangible personal property. The repair company owes sales/use tax on the part used to perform the repair service."
A costly part. It's the same $65 visit, but this time the company paid $80 for the part and charged one $200 fee. Eighty dollars is 40% of $200. That's far more than 10%, so the whole repair charge is taxed. The $65 service call is taxed as well.
Read the exact wording
"The part cost $80 when the company bought it. The company charges a $200 fee for the repair, which is inclusive of the part. The repair charge is taxable because the cost of the part is more than 10% of the overall charge of the service. The $65 is also taxable, because the charge is associated with the delivery of tangible personal property."
Look at what the state measures in both. It's what the company paid for the part, set against the full price you were charged.
The service call fee
The fee for coming out is its own question. The bulletin says it depends on why the tech came and how the charge is set up. In the state's two washing machine examples, both one-price jobs, the $65 went the same way as the repair charge. Where the repair charge is exempt, the $65 is exempt, because it wasn't tied to bringing you goods. Where the repair charge is taxed, the $65 is taxed too.
The bulletin also covers a trip made to bring out a part the company already knew you needed. That delivery charge is tied to the part. The part is taxed.
What to look for on your own bill
You can check a bill in a minute.
- The labor line: is there one, with its own price?
- The parts line: are the parts listed apart from the labor?
- The service call: is the fee for the visit on its own line?
- The tax line: which of those lines does the tax sit on?
If something doesn't add up, ask the company to walk you through it.
What services are taxable in Indiana?
A repair to goods is a service. The bulletin says the charge for it is generally exempt when it's listed apart from the materials. We can only answer for repairs, since that's what Bulletin #60 covers.
It's not a list of every service in the state. The Department of Revenue keeps the rest in its sales tax information bulletins, one topic at a time.
Two kinds of repair follow other rules.
Built-in appliances
The bulletin has a different rule for things fixed to the house. Its example is a furnace. When an item is "affixed to real property," the rules for contractors apply, not the repair rule above.
The bulletin also says which machines usually count. Fridges, stoves, dishwashers, washers and dryers typically stay goods, not part of the house, so the repair rule above is the one for them. Garbage disposals, water heaters and water softeners are on its list of things that can become part of the house once they're put in. A built-in wall oven isn't named either way. In the bulletin's furnace example, a $200 repair at one price, part and all, wasn't taxed, as long as the company had paid the tax on the part.
Read the exact wording
"Examples of items that typically remain tangible personal property and, therefore, are not considered construction material include, but are not limited to: personal computers, televisions, refrigerators, stoves, dishwashers, clothes washers and dryers, window air conditioning units, and other removable items such as furniture."
From Indiana Department of Revenue, Sales Tax Information Bulletin #60
Repairs under a warranty or service plan
Those follow a different bulletin, Sales Tax Information Bulletin #2, from November 2022.
- The maker's warranty: the parts it covers aren't taxed again, because they count as sold with the machine. A deductible or other fee you pay under it is taxed.
- A home warranty or extended warranty you bought on its own: the plan itself isn't taxed. The company that does the repair owes the tax on the parts it uses. In the bulletin's example, the $100 deductible the customer paid wasn't taxed.
Read the exact wording
"Any parts transferred to a buyer under the terms of an original manufacturer warranty or dealer warranty are not subject to Indiana sales tax because the parts and or property are considered to have been sold with the product as a part of the retail transaction on which sales tax was collected."
From Indiana Department of Revenue, Sales Tax Information Bulletin #2
Before the work starts
Tax is the last line on the bill. The lines above it matter more, and the best time to see them is before any work begins.
- Ask for the price in writing. Our guide on cancelling an in-home repair in Indiana covers what you can and can't undo once you've agreed.
- Know who's coming. See whether an appliance repair tech needs a license in Indiana.
- Know how the call works. Here's how repair calls work on this site.