Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
190.0000 CONSTRUCTION CONTRACTORS—Regulation 1521
(a) IN GENERAL—ACTIVITIES CONSTITUTING CONTRACTING OR MAKING OF IMPROVEMENTS
190.0458 Irrigation Systems. A contract to furnish and install a self-powered irrigation system which propels itself up and down the field, guided by a signal emanating from a buried guide wire and drawing water from a canal paralleling the field being irrigated, is a construction contract for the installation of machinery and equipment except for the buried wire, which is material. This conclusion is based on the fact that the system is intended for use in the production of tangible personal property, i.e., farm crops, and is not essential to any fixed works, e.g., building. It does not lose its identity as a particular item of equipment and would not damage the realty if removed since it is not attached.
A contract to furnish and install an irrigation system, utilizing a center pivot point consisting of a concrete pad on which is mounted the rotating framework from which water is applied to the target area, is a construction contract for the installation of fixtures, except for the buried wire used to direct the moving parts, which is material. This conclusion is based on the fact that the hub of the rotating framework is attached to the realty, the system's peculiar adaptation to the particular piece of land which it serves, and the intention that it remain in place as evidenced by the first two factors. 8/31/79.