NY TSB-A-24(32)S Sales Tax 2024-08-14

Does a New York jeweler have to charge sales tax on repairing, cleaning, resizing, or engraving customers' own jewelry and watches?

Short answer: Yes. Receipts from repairing, cleaning, polishing, resizing, gemstone setting, battery and crystal replacement, and similar work on a customer's own jewelry or watch are taxable as servicing/repairing tangible personal property under Tax Law § 1105(c)(3). Engraving is also taxable, as fabricating/processing the customer's property under Tax Law § 1105(c)(2).

Disclaimer: This is an official New York State Department of Taxation and Finance Advisory Opinion (TSB-A), issued by the Office of Counsel at a taxpayer's request. It is limited to the facts set forth in it and binds the Department only with respect to the petitioner to whom it was issued, and only if that petitioner fully and accurately described all relevant facts; another taxpayer cannot rely on it. It reflects the law, regulations, and Department policy in effect when issued and may since have changed. Taxpayer-identifying details are redacted. New York State and local sales taxes are administered centrally by the Department. This summary is informational only and is not legal or tax advice. Consult a licensed New York tax professional about your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

A jewelry store that buys, sells, and trades jewelry also repairs and services jewelry and watches that its customers own and keep for personal use. The work — done by a master jeweler — includes cleaning and polishing, engraving, gemstone setting and replacement, prong retipping, rhodium coating, ring restoration and soldering, plus watch band, battery, gasket, crystal, dial, stem/crown, and mechanical work, water-resistance testing, and more. The store asked whether its charges for all of this are taxable. The Department's answer: yes — these repair and servicing charges are subject to New York State and local sales tax.

New York taxes the service of maintaining, servicing, and repairing tangible personal property that isn't held for sale in the ordinary course of business (Tax Law § 1105(c)(3)). The regulation defines that broadly: it's any activity that keeps property "in a condition of fitness, efficiency, readiness or safety," or restores it to that condition (20 NYCRR 527.5(a)(3)). The customers' rings, necklaces, and watches are their own personal property, so cleaning, repairing, resizing, replacing parts, and reassembly all fall squarely within taxable repair/servicing.

Engraving is taxable too, but under a different provision: Tax Law § 1105(c)(2) taxes producing, fabricating, processing, printing, or imprinting tangible personal property for a customer who furnishes the property (and didn't buy it for resale). Engraving a customer's ring or watch is processing/imprinting their property, so those charges are taxable as well. Bottom line for jewelers: repair, service, and engraving labor on customer-owned pieces is taxable, even when separately from any sale of new jewelry.

What this means for you

Jewelers and watch-repair shops

Charge sales tax on your repair, cleaning, polishing, resizing, stone-setting, plating, restoration, and battery/crystal/band work performed on items your customers own. It doesn't matter that you may also sell new jewelry; the service of fixing or servicing the customer's own property is independently taxable under § 1105(c)(3). Collect tax at the combined State and local rate where the customer takes delivery of the serviced item.

Engraving and personalization

Engraving is taxable as fabricating/processing the customer's property (§ 1105(c)(2)) — treat it the same as your repair charges. The same logic reaches imprinting or processing a customer-furnished item generally.

When the analysis differs

If you're servicing an item you're about to sell (inventory held for sale), that's not a taxable service to a customer — it's work on your own stock. Tax then attaches to the eventual retail sale of the finished piece. The taxable-service rule here is specifically about work on property the customer owns and keeps. Note: parts you install in a repair are part of the taxable repair charge; buying those parts to resell as part of a taxable repair can be a purchase for resale.

Accountants and tax professionals

This is a clean application of § 1105(c)(3) (repair/maintenance/service of TPP) plus § 527.5(a)(3)'s broad "condition of fitness/efficiency/readiness/safety" standard, with engraving pulled in under § 1105(c)(2). The key fact driving taxability is that the jewelry and watches are held by customers for personal use — not held for sale in the jeweler's ordinary course of business.

Common questions

Q: Are jewelry and watch repairs taxable in New York?
A: Yes. Cleaning, repairing, resizing, stone setting, plating, restoration, and battery/crystal/band replacement on a customer's own jewelry or watch are taxable repair/servicing of tangible personal property under Tax Law § 1105(c)(3).

Q: Is engraving taxable?
A: Yes, but under Tax Law § 1105(c)(2) — engraving a customer-furnished item is taxable fabricating/processing of their property.

Q: What if I'm fixing up a piece I'm going to sell?
A: Work on your own inventory held for sale isn't a taxable service to a customer; tax instead applies to the eventual retail sale. The taxable-service rule covers work on property the customer owns.

Q: Can I rely on this opinion?
A: No. An Advisory Opinion binds the Department only as to the petitioner and the facts it described. It illustrates the Department's reasoning but cannot be relied on by another taxpayer.

Citations and references

Statutes and regulations:
- Tax Law § 1105(c)(3) (installing, maintaining, servicing, or repairing tangible personal property not held for sale)
- Tax Law § 1105(c)(2) (producing, fabricating, processing, printing, or imprinting a customer's tangible personal property)
- 20 NYCRR 527.5(a)(3) (defines maintaining, servicing, and repairing — keeping/restoring property to a condition of fitness, efficiency, readiness, or safety)

Source

Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao.htm
Opinion: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales/24-32s.htm
Printer-friendly PDF: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a24-32s.pdf

Original ruling text

Sales Tax
August 14, 2024
Office of Counsel

The Department of Taxation and Finance received a Petition for Advisory Opinion from [ redacted ] (Petitioner). Petitioner asks whether receipts from its sale of repairs and other services to jewelry and watches are subject to New York State and local sales tax (tax).

We conclude that Petitioner’s receipts from the sale of jewelry and watch repairs and services are subject to tax.

Facts

Petitioner operates a jewelry store that buys, sells, and trades jewelry. Petitioner also repairs and services jewelry and watches for its customers for a fee. Petitioner’s services are performed on jewelry and watches held by its customers for the customers’ own personal use. Petitioner’s services are performed by a master jeweler and generally include cleaning, repairing, and/or resizing the jewelry or watches. These services may require disassembly, repairing, servicing, or replacing parts, adding parts, and reassembly of the jewelry or watch.

Specifically, jewelry services may include: cleaning and polishing; engraving; gemstone setting or replacement; prong retipping, rebuilding or replacement; rhodium coating; and ring restoration, reshaping, soldering, or repair. Watch services may include: band replacement, repair, or refinishing; battery or gasket replacement; crystal replacement; dial refinishing; engraving; link additions or removals; mechanical servicing or replacement; stem and crown repair or replacement; restoration of vintage timepieces; and water resistance testing.

Analysis

Sales tax is imposed on receipts from the sale of specific services, including generally: producing, fabricating, processing, printing, or imprinting tangible personal property, performed for a person who furnishes the property, not purchased for resale, upon which the services are performed (see Tax Law § 1105[c][2]); and installing tangible personal property, or maintaining, servicing, or repairing tangible personal property not held for sale in the ordinary course of business (see Tax Law § 1105[c][3]). “Maintaining, servicing and repairing” includes all activities that relate to keeping tangible personal property in a condition of fitness, efficiency, readiness or safety or restoring it to such condition. See 20 NYCRR 527.5(a)(3).

Petitioner performs repairs and services to jewelry and watches held by its customers for the customers’ own personal use. Petitioner’s repair and other services, except engraving, are activities that involve installing tangible personal property, or maintaining, servicing or repairing tangible personal property — jewelry and watches — not held for sale in the ordinary course of business. Accordingly, the receipts from such repairs and services are subject to tax. See Tax Law § 1105(c)(3); 20 NYCRR 527.5(a)(3). Further, tax is also imposed on receipts from the services of producing, fabricating, processing, printing, or imprinting tangible personal property, performed for a person who furnishes the property not purchased by that person for resale. Thus, engraving services performed by Petitioner on jewelry or watches held by its customers for the customers’ own personal use are also subject to tax. See Tax Law § 1105(c)(2).

DATED: August 14, 2024

Mary Ellen Ladouceur
Principal Attorney

Note: An Advisory Opinion is issued at the request of a person or entity. It is limited to the facts set forth therein and is binding on the Department only with respect to the person or entity to whom it is issued and only if the person or entity fully and accurately describes all relevant facts. An Advisory Opinion is based on the law, regulations, and Department policies in effect as of the date the Opinion is issued or for the specific time period at issue in the Opinion. The information provided in this document does not cover every situation and is not intended to replace the law or change its meaning.