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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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435.0000 Producing, Fabricating and Processing Property Furnished by Consumers—General Rules—Regulation 1526
Annotation 435.1364
(c) Miscellaneous Operations
435.1364 Rekeying Locks. A customer purchased locks which she took to a taxpayer for rekeying. The locks were recently purchased and had not been installed or previously used for the purpose intended.
In this case, the property, as purchased, was independently functional and operational for the use for which it was originally designed. However, the customer decided to have this newly purchased property fabricated to conform to the customer's specifications. As such, the rekeying operations constituted "a step in the process or services of operations resulting in the creations or production of tangible personal property," which, pursuant to Regulation 1526, constitutes taxable fabrication labor. The passage of time from purchase date to rekeying date is not relevant in determining the taxability of the rekeying charge. For example, if the locks had been purchased three years prior to the time they were rekeyed, but had never been installed, the rekeying operations would still be considered taxable fabrication labor. 7/28/95.