October 31, 1985

You ask whether the remodeling or repair of fur garments is subject to the Massachusetts sales tax.

I. Remodeling

Massachusetts General Laws Chapter 64H, Section 2 imposes an excise on sales at retail of tangible personal property in Massachusetts. The term "sale" is defined to include a fabrication. G.L. c. 64H, § 1(12)(b).

The Sales and Use Tax Regulation 830 CMR 64H.03 ("Service Enterprises") section (5)(e) provides that "[a]ny change in the form or substance of tangible personal property, or any substantial alteration in the form or shape of an existing article of tangible personal property where either party to the transaction furnishes the material, is a fabrication....... A fabrication is a sale subject to the sales tax."
Any substantial alteration in the form or shape of a garment, including a fur garment, is a fabrication subject to the Massachusetts sales tax. However, as General Laws Chapter 64H, Section 6(k) exempts from taxation sales of clothing up to $175.00 of the sales price of any article of clothing, sales tax applies to the total amount charged for the remodeling (including charges for material or fur added and labor), less $175.00.

Example: A customer brings a fur coat to your business establishment for alterations. You charge $800.00 for the remodeling, which includes the cost of labor and all fur added. The sales tax applies to the charge for remodeling in excess of $175.00, which in this example is $625.00. The sales tax, therefore, is $31.25.

II. Repairs

Massachusetts law imposes an excise on sales at retail of tangible personal property in Massachusetts. G.L. c. 64H, § 2. Generally, a personal service transaction is not subject to the Massachusetts sales tax because it is not a retail sale. A repair is ordinarily a personal service transaction. G.L. c. 64H, S 1(13)(c). However, under General Laws Chapter 64H, Section 1(13)(c), and as the Sales and Use Tax Regulation 830 CMR 64H.03 ("Service Enterprises") further explains, a personal service transaction is subject to the sales tax if the service enterprise does not separately state the value of materials furnished in connection with the service when the value of the materials so furnished is not inconsequential (value of 10% or greater of the total charge) in rotation to the total charge for labor plus materials. In this situation the presumption is that the entire charge for labor plus materials represents the sales price of the taxable tangible personal property.

Several recent Letter Rulings further explain the proper application of the sales tax to repair services. In such previous rulings the materials furnished in connection with repairs were items of tangible personal property, sales of which are subject to the sales tax. See Letter Rulings 85-1, 85-8, 85-18, 85-19. However, the sale of materials used in connection with the repair of clothing, including fur garments, is exempt from the sales tax. Section 6 (v) of Chapter 64H specifically exempts from the sales tax, "[s]ales of wearing materials or any cloth made of natural or synthetic fibers and used for clothing purposes". Included within this exemption are such notions as buttons, elastic binders and tapes, thread and zippers for use on clothing. Thus neither the labor nor the materials used in connection with the repair of clothing, including fur garments, is subject to the sales tax, regardless of whether labor and material charges are separately stated on the bill to the customer.

In summary, then, the alteration of a fur garment is a fabrication and the charge is subject to the sales tax. If a fur garment is merely repaired, for example when tears are sewn, buttons replaced, the charge is not subject to the sales tax.

Very truly yours,
Commissioner of Revenue
IAJ/SFR:afbp
LR 85-69