The Georgia Department of Revenue separates labor into different categories: repair labor, installation labor, and fabrication labor.
- Repair labor is defined as "labor to repair or restore an item to its original form".
- Installation labor is defined as "labor to affix, connect, or make an item ready for use".
- Fabrication labor is defined as "labor to make a new item or change an existing item into a new item".
According to an article, "Repair and installation labor for tangible personal property is exempt from sales tax; however, it must be separately stated from the material charges on an invoice."
If fabrication labor is being provided, the entire charge is taxable regardless if the labor charges are listed separately.
If you have a repair or installation invoice for tangible personal property from a vendor that is a lump sum, request a breakdown on material versus labor, as only the material charge will be taxable. Since labor is usually a larger portion on the invoice, you will not have to pay the sales tax for work provided.
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