Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
190.0000 CONSTRUCTION CONTRACTORS—Regulation 1521
(a) IN GENERAL—ACTIVITIES CONSTITUTING CONTRACTING OR MAKING OF IMPROVEMENTS
190.0280 Component Parts—Installation of. The assembling of fixtures, as distinguished from the installation, is regarded as a step in the production, fabrication or processing of tangible personal property the charges for which must be included in taxable gross receipts. On the other hand, when the assembling of the parts and the installation of the fixture constitute an indivisible operation, that is where the fixture is assembled by attaching each part to the realty and the fixture does not exist as a unit until its parts are attached to the realty, the activity would constitute nontaxable installation. We would regard the component parts as the property sold.
However, any assembly done prior to attachment to the realty constitutes taxable fabrication. Thus if part A is attached to the realty and then part B is attached to part A, to become part of the realty, the activity is nontaxable installation. If part A is attached to part B, and then they are attached to real property, the attachment of part A on part B constitutes taxable fabrication while the attachment of the parts to the realty constitutes nontaxable installation. 5/2/50.