Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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S

515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501

Annotation 515.0063

(a) IN GENERAL—SERVICE DISTINGUISHED FROM SALE

515.0063 Consultation, Installation and Handling Charges. A taxpayer was hired to review a customer's office situation, recommend a computer network, and provide and install that network. The taxpayer charged the customer separately for the consulting, handling and installation. If the taxpayer provided consultation only and the contract did not provide for any transfer of tangible personal property to the customer, the charge for consultation would not be taxable.

However, under the facts in this situation, the contract provides for the sale of tangible personal property to the client. As a part of this contract, the taxpayer provided preliminary consultation and recommendations regarding which computer network to acquire. This would be a contract for sale of the tangible personal property, and the consultation and handling would be a part of that sale. However, the charge for installing the property is not subject to the tax. 12/2/91.