Sales Tax on Lube Services?

Do you charge sales tax on entire amount of oil change?

I ask this because someone told me that you should charge sales tax only on the "product" portion and not the "service portion". In other words, if you say charge $30 for oil change, maybe one would say that $20 is filter and oil cost so you would charge sales tax on $20 and you would NOT charge sales tax on the labor portion($10).

Is this true or do you charge sales tax on entire amount regardless?

Thank you.

You should check with your local tax assessor/collector. Years ago everyone here used to charge a flat sales tax for the entire oil change price, but our sales tax laws now require that it be broken down into parts and labor, with the labor not taxable. It depends entirely on what your state/county tax laws are.

Tom that is correct. You can't TAX labor and labor is built into the $30 price, So you need to break it down on your invoices. Plus you won't have to pay so much taxe awell. Atleast here in Texas thats how we do it.

I think the way our system is set up we only charge tax on the cost of the parts that are included in the service. So lets say we use 5 qts of oil @ $2 and an oil filter at $3, the tax is only applied to that $13 instead of our full service price of $36.99.

Here in VA they can't tax labor...at least not yet anyways

In the great state of Florida, if any service is for labor AND included materials, than everything is taxable. And if they could figure out a way to tax the tax, then I am certain they would do that to.