95-052
Response
August 29, 1995
Request
Utah State Tax Commission
Sales Tax
210 N. 1950 W.
Salt Lake City, UT. 84134-0400
ATTN: XXXXX
RE: Private Home Owners Sales
Tax
(for a well drilled on their property)
Dear XXXXX,
I spoke with XXXXX, approximately on XXXXX, in regards to sales tax for
private home owners having a well drilled on their property. She spoke with an auditor and was told they
are tax exempt. I, again, inquired
about private home owners being exempt from sales tax and asked if I could get
a copy of this in writing and I was mailed a Form TC-721. This form does not state whether private
home owners are exempt or not.
For this reason, I am requesting, in writing, as instructed by XXXXX,
confirmation that Private Home Owners who are upgrading their property with
merchandise that can not be removed off their property should they ever sell,
trade, etc., are tax exempt.
Thank you for your time and effort in this matter. I appreciate all you can do for me. If you need more information, I can be
reached at XXXXX most any time. Thanks
again.
Sincerely,
XXXXX
XXXXX
RE: Advisory Opinion - Application of sales tax
to drilling services.
We
have received your request for an advisory opinion regarding the application of
sales tax to services for drilling a well on a homeowner's property. We find as follows:
1. If you contract to provide drilling
equipment, but the homeowner provides the equipment operator, your transaction
is deemed a taxable equipment rental.
This is true even if you provide an employee to observe or supervise the
drilling operation.
2. If you contract to provide drilling
equipment and an operator, the contract is viewed as a contract for tax exempt
services.
3
. If you provide construction materials
and build some type of conduit and pumping system appurtenant to the well,
those materials are considered construction materials that will be converted to
real property. In that case, you as the
real property contractor, must pay sales tax on your purchase of those
items. Do not charge your customer
sales tax on the transaction.
Please
let us know if we can answer any other questions.
For
the Commission,
Alice
Shearer
Commissioner