Laws, Regulations and Annotations


Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations

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190.0000 Construction Contractors—Regulation 1521

Annotation 190.0829

(a) In General—Activities Constituting Contracting or Making of Improvements

190.0829 Sale and Installation of Plantation Shutters. Customers contract with Company A, a home-improvement retailer, for the sale and installation of plantation shutters for a lump-sum price. The plantation shutters are similar in form and function to venetian blinds or shades and therefore are considered to be fixtures. Company A arranges with an independent and unrelated subcontractor for the furnishing and installation of the plantation shutters for a lump-sum price. Since the subcontractor, not Company A, will actually furnish and install the plantation shutters, the subcontractor is the "contractor" referred to in Regulation 1521(b)(2)(B). In general, a subcontractor cannot avoid tax liability for tax on the sale or use of materials or fixtures furnished and installed by the subcontractor by taking a resale certificate from the prime or general contractor. (Regulation 1521(b)(6).)

Therefore, the sale by Company A to its customer is not subject to tax when the subcontractor both furnishes and installs the plantation shutters. As the general contractor in the above scenario, Company A is neither the retailer nor the consumer of the materials and fixtures, and it may not properly collect sales tax reimbursement or pay the sales tax. The subcontractor is the retailer of the plantation shutters and must report and pay tax to the Board measured by the sale price of the fixture to Company A. 7/21/04. (2005–2).