Alterations

Income from providing alteration services is subject to the retailing business and occupation (B&O) tax, and you must collect retail sales tax from your customers. The retail sales tax rate you charge is based on the location where your customer receives the goods you alter for them. Usually, that location is your business. You can find the appropriate sales tax rate by using our Tax Rate Lookup Tool.

Purchases for resale

The purchase of tangible personal property for resale or as a component or ingredient of the cleaned article is a wholesale purchase. You may use a reseller permit to purchase these items without payment of retail sales tax. If you pay sales tax to the vendor, you may claim a Taxable Amount for Tax Paid at Source deduction for the value of the taxed purchases.

You may use your reseller permit to purchase items that will be resold without intervening use, such as:

• Thread.
• Buttons.
• Zippers.

Purchases for your own use

You are considered the consumer of items that are used to provide these services. Purchases made for personal use are subject to retail sales tax. If the seller does not collect retail sales tax, then you must report use tax directly to the department.

Examples of purchases by an alterations service that are subject to retail sales tax or use tax generally include:

• Equipment such as sewing machines, irons, fixtures, and furniture.
• Supplies such as needles, scissors, measuring tapes, and stationery.