Extended warranties

From the 2024 DOR Tax Exemption Study

82.04.050(1)(a)(vi) - Extended warranties Description Purchases made to honor an extended warranty do not meet the criteria of a retail sale and are exempt from retailing B&O tax and state and local sales tax. Instead, these purchases are subject to wholesale B&O tax. Purpose Ensures buyers do not pay sales tax on replacement items or parts covered by an extended warranty. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $46.990 $48.980 $49.980 $51.980 Local Taxes $21.110 $21.900 $22.680 $23.500 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $44.980 $49.980 $51.980 Local Taxes $0.000 $20.070 $22.680 $23.500 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - Growth rate mirrors the taxable sales and use taxes growth rate reflected in the Economic and Revenue Forecast Council's March 2023 forecast. - The U.S.'s proportion of worldwide warranty claims is the same as the U.S.'s gross domestic product as a percent of worldwide gross domestic product. - The U.S.'s prop