Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 295.0027


295.0027 Air Filters—Sale and Installation. A taxpayer will furnish, deliver, and sometimes install air intake filters for heating and air conditioning systems. The customer will sign a one year contract for the furnishing and delivery, or for the furnishing, delivery and installation of filters. The drop-off service is $19, which includes delivery of the filter to the customer's door by taxpayer's service technician, but not installation. The installation service is $29, which includes furnishing, delivery, and installation of the filter by taxpayer's service technician.

The contract for the delivery of the filters for the $19 charge is for the retail sale of tangible personal property, and the full $19 amount billed to the customer for delivery of each filter will be subject to sales tax.

In this case it seems the difference between the $29 including installation fee and the $19 charged without installation is solely for "labor or services used in installing or applying the property sold." The amount of this installation charge,

$10, is not taxable pursuant to section 6012(c). However, $19 of the taxpayer's $29 charge to the customer is taxable gross receipts from the sale of the filter which the taxpayer installs. 7/14/95.