Friday, August 05 2011
As of August 1st, a 7% sales tax will be added at closing to the price of all home service contracts.
Please make sure that you are quoting the correct amount to your clients. The title company must also have the correct amount of the home warranty on the HUD.
For pending transactions, even though the sales tax was not in effect when the contract was written, the state requires that the tax be collected at the time of closing. Any closing after August 1st, 2011 is subject to the 7% sales tax.
For example: A home warranty for $399 would have to add $27.93 (7%) for a total of $426.93.
This applies to all home warranty companies.