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 190.2335


190.2335 Walk-In Coolers. Walk-in coolers are also called cooler boxes, freezers, or refrigeration "rooms." The classification of walk-in coolers and the respective tax application is as follows:

(1) Freestanding, prefabricated, self-contained units manufactured at the manufacturer's plant and transported as completed units to the jobsite.

These are tangible personal property, machinery and equipment, and tax applies to the gross receipts from this sale at retail. If these are furnished as a part of a construction contract the measure of tax is determined under the criteria set forth in Regulation 1521(b)(2)(C).

(2) Prefabricated units which do not lose their identity when installed but which are affixed to the structure in such a manner that they become fixtures.

Prefabricated units, when finally installed, are fixtures under Regulation 1521 but are treated as fixtures only in the hands of the person who affixes them to the realty. These rooms must be connected to the coolant system before they are fixtures.

If all the manufacturer of the walk-in cooler does is take prefabricated panels to the jobsite and there assemble them into a freestanding room, the assembled room is tangible personal property in his hands and when sold by him, although it is a component of a fixture when affixed to the realty by someone else. The prime contractor who is required to furnish and install the assembled refrigerated room is the retailer of the fixture unless the prime contract is with the United States in which case the installing contractor is the consumer of the fixture.

If the same person assembles the panels into the freestanding room and affixes it to the coolant system, the room is a fixture and the measure of tax is governed by Regulation 1521(b)(2)(B) or section (b)(1)(A) if the prime contract is with the United States.

(3) Walk-in coolers which are a combination of materials and fixtures. These units consist of sills which are affixed to the concrete floor by nails or bolts. Panels are affixed to the sills panel by panel until the room is assembled.

If walk-in coolers are constructed in the above manner, the sills, wall panels, roof panels, and doors are materials. The refrigeration units, which includes the compressor and evaporators, are fixtures. Piping installed to connect the compressor with the room is materials. 8/4/77.