Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 295.0064


295.0064 Consulting and Architect Services. The taxpayer, a licensed architect, contracts to assist a customer in facility planning, designing, scheduling, budgeting, contracting, and purchasing of furniture and equipment for expansion into new facilities. The furniture and equipment placed in the new facility consist of existing used items transferred from existing facilities and items purchased and resold by the taxpayer to its customer at cost. The taxpayer hires independent third party service providers to install and assemble the new and used furniture and equipment at the new facility. The taxpayer separately bills the customer for the installation charges of the third party service providers.

Under these facts, the taxpayer may deduct from taxable gross receipts its charges for professional consulting and architectural services. However, all of the taxpayer's charges which are related to the acquisition and sale of the furniture and equipment are includable in the taxable gross receipts without any deduction for the cost of the property sold, the cost of materials used, labor, or service cost or any other expense. Thus, the measure of the sales tax of the furniture and equipment would be taxpayer's cost plus its charges related to the sale of the furniture and equipment.

The taxpayer may deduct from the gross receipts the charges for the third party service providers installing the furniture and equipment, but charges for assembly are includable in taxable gross receipts. 1/13/94.