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Originally Posted by Andrew H.
As mentioned below, we typically don't pay sales tax on services. If you get work done by a plumber, there will be no tax on the labor, but you will have to pay tax on any parts he provides. Same is true at a car repair shop.
Most states that charge sales taxes specify that it applies to tangible and intangible goods...but some states only apply it to tangible goods.
I think the most confusing area is groceries. Most states (I think) don't charge sales tax for groceries, but what counts as "groceries" varies widely, with ready-to-eat food typically being charged tax...although what ready-to-eat food is can be complicated, too. In my state, toilet paper is taxed, but I've been to states where it isn't.
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Evidently, this varies widely by state.
We pay sales tax on labor performed by a plumber and mechanic. Even shipping charges are taxed. Digital goods are taxed also.