Publication 62, Locksmiths
Appendix
Common locksmith transactions
Summary table—“Applying Tax to Locksmith Labor and Service Charges”
This section is intended to illustrate the principles described in the other sections of this publication. It gives examples only and should not be considered a comprehensive list.
Fabrication of personal property
- A customer brings you a lock that is missing a key and asks you to make a new key. Using one or more techniques (impression, duplication, disassembly, cutting by code, etc.), you make a key to fit the lock. Making a key is a taxable transaction (fabrication), provided you give the customer the key. All related labor and service charges are taxable.
- You travel to a customer's home to make an automobile ignition key or a new house key. You charge a trip charge in addition to the charges for making the key and the key itself. Making a key is a taxable transaction (fabrication), and tax applies to all charges for materials, labor, and services, including any trip charge or service call charge.
Installation of a lock—real property
- You install a door lock in a customer's shop and charge one lump-sum amount for the installation, the lock, and a trip charge. Your charges, including your trip charge, are not taxable. Since you have performed a lump-sum construction contract (see Applying tax to purchases of materials furnished in construction contracts), you are the consumer of the lock and other materials. If you did not pay an amount for tax to your supplier when you bought the lock, you must pay use tax on its purchase price with your sales and use tax return.
- Would tax apply differently in the example above if you billed under a time-and-materials contract and charged your customer an amount for “sales tax” on materials? Yes. In a time-and-materials contract where you charge an amount for “sales tax” computed on a marked-up billing for materials, you are the retailer of the materials you provide. Tax applies to your charge for materials. Your installation charge, however, is not taxable. Your trip charge is partially taxable (see Applying tax to purchases for materials construction contracts).
Installation of a lock—personal property
- You travel to a location away from your shop and install a lock in a customer's used car. You charge separate amounts for materials, installation, and travel. You are the retailer in this situation, and your sale of the lock is taxable (see Installation— installing locks and similar work). Your installation charge is not taxable. Your travel charge is partially taxable (see Other Locksmith Charges, Sales, and Purchases).
Repair of personal property and fabrication of a key
- A customer provides a lock and asks you to change the lock so that the existing key will no longer operate the lock. She also wants you to provide a new key. You take apart the lock and change the internal components so that the original key will not work, using some components from the lock itself and some minor new components. You charge your customer a lump-sum amount for the job.
Do you apply tax differently if the customer furnishes a functioning key or if you use only original parts for the repair?
The object of the transaction is to rekey the lock, which is considered a repair service, and to provide a new key that works. Tax applies in the same way regardless of whether your customer provides a key or whether you use only original components for the repair.
How does tax apply to amounts for labor included in your charges?
Rekeying a lock is considered a repair service, as noted above. The labor for rekeying the lock is not taxable. The labor for making the key, however, is taxable as fabrication labor. Your fabrication charge is considered part of the total charge for the new key.
How does tax apply to amounts for materials included in your charges?
Tax applies to your charge for the new lock components and the total charge for the new key (including the fabrication labor charge for making the key) if their combined retail selling value is more than 10 percent of your total lump-sum charge. If their value is lower, you are the consumer of the materials, and you owe use tax on their purchase price unless you paid an amount for tax to your supplier when you bought them. Tax would not apply to the amount you charge your customer for materials (see Applying tax to charges for materials—jobs including labor or services performed on personal property).
| Applying Tax to Locksmith Labor and Service Charges | |||
|---|---|---|---|
| Type of work you perform | Labor taxable (fabrication) | Labor not taxable (repair) | Labor not taxable (installation) |
| Making new keys Making key by duplication or cutting by code |
X All charges associated with making the key, including any trip or service charge |
||
| Removing and replacing lock in order to make new key | X | ||
| Rekeying locks Removing and replacing lock cylinder, repinning a new cylinder to a new code, shimming or picking lock cylinder |
X | ||
| Cutting new key | X | ||
| Making “old key” if necessary to rekey lock | X If you provide key to your customer |
X If you use key only to open lock for rekeying and do not deliver key to customer |
|
| Opening locks | X | ||
| Installing locks | X On new personal property such as automobiles (see note) desks, safes, boats |
X On used personal property such as autos (see note) desks, safes, boats |
X In real property, such as houses, office buildings, apartment buildings |
| Safes–servicing and installing Changing combinations, servicing | X | ||
| Installing floor or wall safe in building | X | ||
| Alarms—installing new systems | X In new automobiles (see note below) |
X In buildings or used automobiles |
|
Please note: Fabrication labor is not taxable if your transaction is a sale for resale. An automobile is considered “new” if:
- It qualifies as a new vehicle when registered with the Department of Motor Vehicles.
- You contract to work on the vehicle within 60 days of its registration date.
Revision July 2026