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This Ruling has been obsoleted by AN 94(4)

Ruling 89-194


Services to industrial, commercial and income-producing property are subject to sales tax.

The new construction exemption for services to the above properties does not apply to the following:

  1. new sewer and gas pipes;
  2. resurfacing or patching of a private road or driveway;
  3. destruction or demolition of the property including the paved surfaces, unless the entire charge for the service involving the total demolition of a parking lot or road is part of a new construction contract;
  4. installation of a HVAC system in an existing building; and
  5. removal of old pipe.

The new construction exemption would apply to the following:

  1. construction of a new road; and
  2. construction of a new parking lot or expansion of an existing one (old road or old parking lot must be completely removed for new construction exemption to apply), including demolition as long as it is part of the contract for new construction.

The following services are taxable to industrial, commercial and income-producing properties:

  1. driveway resurfacing; and
  2. driveway patching (taxable to a condominium association based upon the ration of non-owner occupied units to total units).

Driveway sealing is considered to be a taxable maintenance service.

Repairs to an air conditioning unit, dishwasher, garbage disposal, hot water heaters, furnace and oil burner are considered to be a taxable service.

The following are not subject to tax:

  1. installation of a sink, toilet, bathtub, dishwasher, garbage disposal, hot water tank, furnace and oil burner in new construction or an existing one, two or three family owner-occupied dwelling; and
  2. replacement of sewer lines on property owned by a municipality under a public road.


November 7, 1989