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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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L
330.0000 Leases of Tangible Personal Property—In General—Regulation 1660
Annotation 330.2270
(a) In General
330.2270 Gaseous Oxygen Storage Tanks. A hospital has two storage tanks for gaseous oxygen that are part of a storage unit set in place, with a back-up storage unit for emergencies. The gas storage tanks are referred to as "vessels" to distinguish them from the portable gas "cylinders". The hospital questions its supplier collecting tax measured by the rental payments.
The application of tax to leases of vessels is different than the application of tax to leases of cylinders. Large items such as vessels are considered to be fixtures. In this case, the supplier is leasing fixtures and has elected to pay use tax measured by the rental payment. Thus, the supplier (lessor) must collect tax at the time the hospital makes the rental payments. This opinion applies only to the taxation of the leases of the vessels. It does not apply to charges for the gaseous oxygen itself. 4/8/91; 5/3/91.