Response
July 17, 1992
July
17, 1992
XXXXX,
UT XXXXX
Re:
Advisory Opinion
Dear
XXXXX:
This
letter is in response to your recent request for a Tax Commission ruling on whether
sales tax is due on any portion of the charge for services to move tangible
personal property where a portion of the service involves disassembly and
reassembly.
The
Tax Commission policy is to refer such requests to the division most qualified
to analyze the request and make recommendations concerning it. As such, your
request was referred to the Tax Commission's Auditing Division for their
analysis and recommendations. The division's recommendations are as follows:
1. Utah Code Section 59-12-103(1)(g) imposes a
tax on amounts charged for "... services to install tangible personal
property in connection with other tangible personal property." There is no
provision in the sales tax law to impose tax on the charge to move tangible
personal property. The fact that certain types of property are partly
disassembled to move them and reassembled afterward does not make the main
purpose of moving the property taxable.
2. The reassembly of a piece of furniture is
very unlike the labor to fabricate a wall section, which was the subject in the
Attorney General opinion. The reassembly of a piece of furniture or other item
is incidental to moving it.
Based
upon the facts presented in your letter, we are in agreement with the Auditing
Division's recommendations. Obviously, if there are deviations from these
facts, this opinion may be negated.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgment and be appealable to the Utah State Supreme Court. A
Notice of Appeal Rights and a copy of the Utah Taxpayer Bill of Rights are
attached.
For
the Commission,
Joe
B. Pacheco
Commissioner
Joe
Pacheco, Commissioner
Utah
State Tax Commission
160
East Third South
Salt
Lake City, Utah 84134
REQUEST
FOR FORMAL ADVISORY OPINION Sales & Use Tax
Dear
Commissioner:
A
business contracts to move tangible personal property to a second location. In
order to make the move, the mover deems it necessary to disassemble the
property, move it to the new location and then reassemble it.
Is
the transaction explained above subject to the Utah sales tax. If the transaction
is taxable, would any of the component parts be exempt if billed separately.
Some
examples of moving when disassembling and assembling is involved are:
beds,
both water beds and regular beds
home
entertainment centers
computers
& peripheral parts
conference
tables
office
work stations
grand
piano
In
any of the examples listed above charge for reassembling the property would be
a small part of the total charge. Take, for instance, a company decides to
relocate its accounting department from the 5th floor to the 4th floor, and
that they have similar equipment to that which the tax commission has in the
Heber Wells Building. They have executive office with their desks, tables,
chairs, files & walls. They have work stations for accountants, clerks,
etc. They also have a couple of conference rooms and a library. The
reassembling of the work stations, etc. is a minor part of the whole job.
This
job could be done by either a moving company or a retailer who sales &
installs this type of equipment. The original sale and installation was
previously taxed. There is no sale involved in this transaction, only the
service of moving from one location to another.
XXXXX
of the auditing division, referred to an attorney general's opinion that the
charge for putting a customer materials together to make a wall panel is
taxable because of the provision in the law that the charge for attaching
tangible personal property to other tangible personal property is taxable.
It
appears to me that there is a big difference in assembling and reassembling in
order to facilitate a move and putting raw materials together to make a
panel. XXXXX suggested a Formal
Advisory Opinion be requested.
Thank
you for your consideration.
Respectfully,
XXXXX