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
190.1010 Supervision of Installation. A taxpayer who is an engineer provides heating and air conditioning computerized control system components. The taxpayer selects and assembles the control units, programs the units, supervises the installation and is onsite to start up and troubleshoot the installation. The installation is actually performed by the mechanical contractor. The taxpayer's quotes are lump sum, including all taxes.
Although the taxpayer performs some supervision, he is not contractually obligated to install the property. Thus, the taxpayer is not performing a construction contract, and is not a construction contractor within the meaning of Regulation 1521.
Although the taxpayer may design the control system, the true object sought by the customer is the control system, not the engineering service. Therefore, the transfer of the control system is a sale of tangible personal property. 1/20/94.