Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
565.0000 UNITED STATES CONTRACTORS
(b) "IMPROVEMENTS ON OR TO REAL PROPERTY"
565.0290 Heat Exchangers. Hot water generator tanks (heat exchangers) and expansion tanks installed at an Air Force Base pursuant to a contract with the U.S. Government are fixtures, not machinery and equipment. The heat exchanger units are a type of water heater used in conjunction with steam-producing boilers to conduct heat from steam inside coils to the water.
Water heaters are considered essential to, and accessory to, buildings and structures. At least since the revision of Regulation 1521, effective April 1, 1976, affixed water heaters of all types which are connected to water systems have been classified as fixtures, not machinery and equipment, regardless of whether they provide hot water for housekeeping, creature comfort, manufacturing, or service functions. 5/10/79.