Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 330.2310.100


330.2310.100 Lease of Used Modular Office Buildings. Taxpayer purchases and refurbishes used modular office buildings, and then subsequently leases the buildings. The used office buildings are leased as tangible personal property; that is, in connection with the lease of the buildings, the taxpayer does not install the buildings on its customer's property. The taxpayer has paid sales tax on purchases of materials such as sheetrock and ceiling tiles which are used to refurbish the used modular office buildings. The taxpayer did not pay tax reimbursement nor report use tax on the purchase price of the used buildings.

Under these circumstances, the taxpayer is leasing tangible personal property in transactions which are continuing sales and purchases, subject to use tax measured by rentals payable. Therefore, materials purchased the purposes of incorporating it into the modular office buildings to be leased may be purchased ex-tax for resale. Accordingly, the taxpayer may take a tax-paid purchase resold deduction for any sales tax paid on purchases of materials which became a component part of the modular office buildings. The deduction must be taken on the return in which the taxpayer's lease of the building is included in its return. If the deduction is not taken in the proper quarter, a claim for refund must be filed. 3/25/97.