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 190.1490


190.1490 Electrical Service Panel—Related Training and Testing Charges.
A contractor will purchase a large service control panel which includes several float switches, cable, manual, and documentation that the unit has been assembled and tested in the shop. The unit will be delivered to the jobsite for installation by the contractor. The contractor will obtain a separate quote from either the seller of the control panel or a third party to test and adjust the control panel as well as to provide a training session to jobsite personnel on how to operate the unit.

Based on the facts presented, the control panel is a fixture under Regulation 1521(a)(5). Thus, the sale of the service panel from the contractor to its customer is a retail sale subject to tax as set forth in Regulation 1521(b)(2)(B)2. That is, tax applies on the contractor's stated sales price of the panel to its customer or, if not stated, on the cost price of the panel to the contractor. This cost price includes the sale price of the panel to the contractor, the charge for any additional fabrication perform by another person, and the cost in accordance with the formula in Regulation 1521 for any fabrication the contractor performs prior to installation.

When the vendor or a third party provides testing, adjustments, and jobsite training on how to operate the panel sometime after the contractor has installed the panel at the jobsite, such work and training are not considered as jobsite fabrication. The charges for that testing and training are not part of the contractor's taxable gross receipts from the sale of the panel. 6/26/95.