What special rules apply to maintenance contracts?

The tax does not apply to the charge for a maintenance contract unless it must be purchased as a condition of the sale or lease of the property. If you are performing repairs under an optional maintenance contract, you must pay the tax on materials passing to customers unless a separate additional charge is made for them. If you are making repairs under a mandatory maintenance contract, or warranty included in the original selling price, you may claim the resale exclusion on purchases of materials passing to customers.