Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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190.0000 CONSTRUCTION CONTRACTORS—Regulation 1521

Annotation 190.0660


190.0660 Refrigeration Contracts. A refrigeration subcontractor is the retailer of "refrigeration units," and the tax applies to the retail selling price thereof. This price does not include, however, additional charges separately billed for the installation of the units. Even where a lump-sum charge is made, the retail selling price is regarded as the cost price of the fixtures to the contractors, or if the contractor is the manufacturer, the retail selling price is regarded as the prevailing price at which similar fixtures and similar quantities ready for installation would be sold to contractors. Generally, labor "on the job" is installation labor, although not necessarily so in all cases. Where the completed unit is assembled or partially so at the job site, any labor for such assembly is properly regarded as processing or fabrication labor and as such the charges therefor are included within the measure of the tax, as a part of the sale price of the assembled or completely fabricated article. The labor of installing that article is, of course, not subject to the tax. When feeder lines run through floors, ceilings, and walls of the structure, being encased therein or securely attached thereto, these lines and the valves and fittings constituting a part thereof may be treated as "materials."

Where the refrigeration contractor furnishes no fixtures or materials but merely performs the labor and services of installation, the amounts charged by him are not taxable, unless prior to installation he actually performs processing or fabricating work, resulting in the production of the complete fixture or other article of tangible personal property from materials furnished to him. Where he also installs such property, he would be regarded as the consumer of that which might be classified as "materials," in which case his charges would not be taxable. If he both processed a fixture and installed it, he would be subject to tax on that portion of his charge attributable to processing. 4/17/50.