Installation of Tangible Personal Property
In the course of its trucking and hauling services and crane and rigging services, Company is sometimes required to install certain production machinery at the customer's plant. Company may remove the lags from a concrete floor in a customer's plant and relocate them to another location. Company installs the machinery onto the lag. In connection with the installation, Company may have to weld stairs and catwalks which are attached to the production machines. These stairs and catwalks do not become structural components of the building. Company does no electrical or plumbing work.
Whether the above-described installation services rendered by Company are subject to sales and use tax.
The Department considers the on-site labor described herein to be installation labor to tangible personal property and, therefore, not subject to sales tax so long as it is separately stated on Company's bill to its customer. Company must pay use tax as a consumer of the materials used in the installation of the machinery. Such installation should also not be considered as a service to commercial, industrial or income producing property since it is installation of production machinery. Regulation Section 12-426-26(d) provides in pertinent part:
February 22, 1991