Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
330.0000 LEASES OF TANGIBLE PERSONAL PROPERTY—IN GENERAL—Regulation 1660
(a) IN GENERAL
330.2830 Security Alarm Systems. A company assembles and installs security alarm systems. After the system is installed, the company bills the customer an equipment charge and a labor charge. Thereafter, the company bills the customer quarterly for the security alarm system. For an additional fee which is billed separately, the customer may have the system monitored.
Under these facts, the company is leasing the security alarm system rather than providing a service. (Compare with Annotation 330.1920.) Since the system is not leased in substantially the same form as acquired by the company, the lease is a sale and is subject to use tax measured by rental receipts. The taxable rental receipts do not include charges for installation but include the initial equipment charge, charges for assembly or fabrication labor, and the quarterly charges.
The fee for monitoring the system is not taxable since this service is optional and not required in order to lease the system. 11/15/90.