A car wash is subject to sales tax if the service provider takes custody of the vehicle at any time or performs the majority of the cleaning activities for the customer. A car wash facility that offers to its customers both taxable and tax-exempt car washes should separately examine the application of the sales and use tax to each type of car wash sold. It should collect and remit sales tax on the taxable car washes and not collect sales tax on the tax-exempt car washes.
Reference: Important Notice 19-12.
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