Tax Type
Retail Sales and Use Tax
Description
Contractors; Materials Purchased to Fulfill Installation Contracts
Topic
Taxability of Persons and Transactions
Date Issued
10-08-1991
October 8, 1991
Re: Request for Ruling: Sales and Use Tax
Dear*********************
This will reply to your letter of March 5, 1991 in which you request a ruling as to the sales and use tax application to contract installation work being performed by************** (the Taxpayer).
FACTS
The Taxpayer is in the business of contract installation with respect to commercial refrigeration equipment, i.e. walk-in coolers and freezers. The Taxpayer contracts with restaurant equipment dealers to install walk-in refrigeration equipment sold by the dealers to the end users. The equipment retains its identity as tangible personal property after installation. The Taxpayer does not sell any tangible personal property and only purchases installation materials used in fulfilling installation contracts. The Taxpayer is requesting a ruling as to their sales and use tax obligation on equipment installed as well as materials used in the installation.
RULING
It is the responsibility of the restaurant equipment dealer to collect the sales tax from the end user on the sale or lease of all equipment installed. The Taxpayer, as the installer, would be the user or consumer of all materials used in fulfilling the installation contract and would be required to pay the sales tax on such materials at the time of purchase.
If you should have any further questions, please feel free to contact the department.
Sincerely,
W. H. Forst
State Tax Commissioner
TPD/5018K
Rulings of the Tax Commissioner