When an event-staging company both rents out its own tables/chairs AND handles a customer's own equipment for a one-day event, which of those charges owe Tennessee sales tax?

Plain-English summary

An event-staging company helps customers set up for one-time events. It transports items like tables and chairs to and from an event location (hiring a common carrier, since it doesn't own trucks), and its own personnel handle setup and later teardown/removal. The twist: sometimes the equipment belongs to the company itself, which it rents to the customer along with the transport/setup/removal; other times the equipment belongs to the customer, and the company just provides moving/handling services for the customer's own property. When both happen for the same event, the company bills them as separate line items on one invoice (rental charges vs. handling charges). The Department was asked whether either kind of charge is taxable.

1. Renting out its own equipment, plus transport and handling. Fully taxable. Renting tangible personal property (tables, chairs) is a taxable rental under Tenn. Code Ann. § 67-6-204(a) because it's part of the company's regularly established business. And Tennessee's "sales price" rules specifically forbid deducting delivery/transportation charges from a taxable sale or rental's price -- so the transport-and-handling charges tied to the company's own rental equipment get swept into the taxable rental price too, even though they're itemized separately on the invoice.

2. Handling the customer's OWN property for the event. NOT taxable. This is the more interesting half of the ruling. Tennessee only taxes services that are specifically listed by statute, and the closest candidate here -- "installation" of tangible personal property (§ 67-6-205(c)(6)) -- doesn't fit. The Department reasoned that "installation," given its ordinary meaning ("to set up for use or service"), implies something more lasting than a single-event, same-day setup-and-teardown. Because the customer's property is set up and then removed within the timeframe of one defined event, it's not "installation" in the taxable sense. And since it doesn't fall under any other enumerated taxable service either, handling the customer's own property for a single event stays untaxed.

The ruling also noted (though it didn't ultimately need it) that a separate rule exempting movers/warehousemen who move OTHER people's property (Rule 21) doesn't actually apply here anyway, since the company isn't in the general moving/storage business -- it's an event-staging business. That rule was a dead end, not the reason for the nontaxable result; the "not installation" analysis did the real work.

What this means for you

Event staging, rental, and equipment-handling businesses

Keep rental-of-your-own-equipment and handling-of-customer-owned-equipment cleanly separated in your billing and your business model, because they're taxed very differently. Transport and handling tied to YOUR OWN rental inventory rides along as part of the taxable rental price no matter how you itemize it. But handling a customer's own property for a single, defined event isn't "installation" and generally isn't independently taxable, as long as it's genuinely a same-event setup-and-removal rather than a more permanent installation.

Accountants and tax professionals

This ruling's "installation" analysis (ordinary meaning of "install," a single-event setup-and-removal doesn't qualify) is a reusable template for any handling/setup service where installation-style taxation might otherwise be argued. Note the ruling explicitly distinguishes -- and declines to rely on -- Rule 21's mover/warehouseman exemption, since the taxpayer here isn't in that business; don't assume Rule 21 covers general event-handling companies.

Common questions

Q: Is renting out tables and chairs for an event taxable in Tennessee?
A: Yes, as a taxable rental of tangible personal property, and the transportation/setup/removal charges tied to that rental are taxable too, even if itemized separately.

Q: Is charging to move, set up, and remove a CUSTOMER'S OWN equipment for their event taxable?
A: Not under this ruling's reasoning -- because a single-event setup-and-teardown doesn't meet Tennessee's definition of taxable "installation," and it isn't any other specifically enumerated taxable service.

Q: Does the "mover" exemption under Rule 21 apply to event-staging companies?
A: The Department said no -- Rule 21 covers warehousemen and movers generally in the business of moving/storing/packing others' property, which this event-staging company was not. The nontaxable result here rested on the "not installation" analysis instead.

Q: Can another company rely on this Revenue Ruling?
A: No. Tennessee Revenue Rulings are explicitly advisory and NOT binding on the Department, even for the requesting taxpayer. It shows the Department's reasoning, but confirm your own facts with a tax professional.

Citations and references

Tennessee statutes and rules (Tenn. Code Ann. unless noted):

• § 67-6-204(a) (Supp. 2010) (sales tax on rentals of tangible personal property that are part of the lessor's regularly established business)
• § 67-6-102(82)(A) (Supp. 2010) ("sales price"); § 67-6-102(82)(A)(ii) (no deduction for transportation costs); § 67-6-102(82)(A)(iv)-(v) (no deduction for delivery/installation charges)
• § 67-6-102(27)(A) ("delivery charges" definition)
• § 67-6-205(c)(6) (Supp. 2010) (sales tax on installation of tangible personal property remaining tangible personal property after installation)
• Tenn. Comp. R. & Regs. 1320-5-1-.21 (2008) (Rule 21) (movers/warehousemen of others' property render nontaxable services -- distinguished as inapplicable)
• § 67-6-102(92)(A) ("tangible personal property")

Tennessee cases cited by the ruling:

• Eusco, Inc. v. Huddleston, 835 S.W.2d 576 (Tenn. 1992) (undefined statutory terms like "installation" given ordinary/common meaning)
• Ryder Truck Rental, Inc. v. Huddleston, 1994 WL 420911 (Tenn. Ct. App. 1994) (sales tax on services applies only to specifically enumerated services)
• Tenn. Farmers Assur. Co. v. Chumley, 197 S.W.3d 767 (Tenn. Ct. App. 2006); Beare Co. v. Tenn. Dep't of Revenue, 858 S.W.2d 906 (Tenn. 1993) (undefined terms given common usage)

Out-of-state case cited by the ruling:

• Cent. Me. Power Co. v. Johnson, 263 A.2d 713 (Maine 1970) (defining "install" as "to set up for use or service" for state taxation)

Source

• Landing page: https://www.tn.gov/revenue/tax-resources/legal-resources/tax-rulings.html
• Original PDF: https://www.tn.gov/content/dam/tn/revenue/documents/rulings/sales/11-36.pdf

Original ruling text

TENNESSEE DEPARTMENT OF REVENUE
REVENUE RULING # 11-36
WARNING
Revenue rulings are not binding on the Department. This presentation of the ruling in a
redacted form is information only. Rulings are made in response to particular facts
presented and are not intended necessarily as statements of Departmental policy.

SUBJECT
Application of the Tennessee sales and use tax to services involving the moving and handling of
tangible personal property.
SCOPE
Revenue Rulings are statements regarding the substantive application of law and statements of
procedure that affect the rights and duties of taxpayers and other members of the public. Revenue
Rulings are advisory in nature and are not binding on the Department.
FACTS
The Taxpayer provides services involving the transportation and handling of tangible personal
property owned by its customers. The customer contracts with the Taxpayer for the
transportation of items such as tables, chairs, and other equipment to and from an event in which
the customer is participating. Because the Taxpayer does not own moving trucks or other
transportation equipment, the Taxpayer hires a common carrier to transport the customer’s
property to and from the event; the common carrier bills the Taxpayer for this service. Upon
delivery of the tangible personal property by the common carrier to the event location, the
Taxpayer’s personnel physically handle the customer’s property and set it up. After the event’s
conclusion, the Taxpayer’s personnel remove the property and return it to the customer via
common carrier.
If the customer does not have certain items that it requires for the event, such as tables and
chairs, the Taxpayer may rent them to the customer. In this scenario, the Taxpayer charges a
lump sum rental fee to the customer. The rental fee includes all charges associated with the
rental (e.g., charges for transportation, handling, and set-up).
The Taxpayer does not execute a written agreement with respect to either the rental of tangible
personal property or the moving and handling services. The only document a customer signs is a
form used if the customer pays with a credit card. The customer provides the credit card
information and then signs the form as an acknowledgment to the credit card company to charge
his account.

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If the Taxpayer provides both moving and handling services of the customer’s property and
rental of property to the same customer for a single event, the Taxpayer includes both
transactions on a single invoice. However, charges for the rental of the Taxpayer’s property and
charges for moving and handling the customer’s property are separately stated on the invoice as
distinct line items. Thus, where the invoice indicates charges for handling, moving, etc., those
charges only apply to tangible personal property owned by the customer.
QUESTIONS
1.

When the Taxpayer rents tangible personal property to its customer and also provides
transportation and handling of such property, are these services subject to the Tennessee
sales and use tax?

2.

When the Taxpayer provides services involving the transportation and handling of the
customer’s own tangible personal property, are these services subject to the Tennessee
sales and use tax?
RULINGS

1.

Yes. When the Taxpayer rents tangible personal property to its customer and provides
transportation and handling of such property, charges for transportation and handling are
subject to the Tennessee sales and use tax as part of the sales price of the rental.

2.

No. When the Taxpayer provides services involving the handling of the customer’s own
tangible personal property, those services are not subject to the Tennessee sales and use
tax.
ANALYSIS

1.

Rental of tangible personal property belonging to the Taxpayer

When the Taxpayer rents tangible personal property to its customer and provides transportation
and handling of such property, charges for transportation and handling are subject to the
Tennessee sales and use tax as part of the sales price of the rental.
TENN. CODE ANN. § 67-6-204(a) (Supp. 2010) imposes the sales tax on the “sales price of all
leases and rentals of tangible personal property1 . . . where the lease or rental is a part of the
regularly established business, or the lease or rental is incidental or germane to the regularly
established business.”
The term “sales price” is defined in pertinent part as “the total amount of consideration,
including cash, credit, property, and services, for which personal property or services are sold,
leased, or rented, valued in money, whether received in money or otherwise.” TENN. CODE ANN.
§ 67-6-102(82)(A) (Supp. 2010). TENN. CODE ANN. § 67-6-102(82)(A)(ii) disallows any

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TENN. CODE ANN. § 67-6-102(92)(A) (Supp. 2010) defines “tangible personal property” as “personal property that
can be seen, weighed, measured, felt, or touched.”

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deduction from the sales price for “costs of transportation to the seller.” Similarly, TENN. CODE
ANN. § 67-6-102(82)(A)(iv)-(v) disallows any deduction from the sales price for delivery or
installation charges.2
In this case, the Taxpayer’s rental of tangible personal property is subject to the Tennessee sales
and use tax. As discussed above, the lease or rental of tangible personal property is subject to
sales tax where such lease or rental is either a part of the regularly established business, or the
lease or rental is incidental or germane to the regularly established business. TENN. CODE ANN.
§ 67-6-204(a). Here, the Taxpayer is in the business of renting items such as tables and chairs,
which are properly characterized as tangible personal property, to its customers. The Taxpayer
rents such items as part of its regularly established business; thus, the Taxpayer’s rental of
tangible personal property to its customers is subject to the sales and use tax pursuant to TENN.
CODE ANN. § 67-6-204(a).
The sales price of the rental is the total amount charged to the customer. As discussed above, the
term “sales price” is defined in pertinent part as “the total amount of consideration, including
cash, credit, property, and services, for which personal property or services are sold, leased, or
rented, valued in money, whether received in money or otherwise.” Note that TENN. CODE ANN.
§ 67-6-102(82)(A)(iv) specifically provides that the sales price is determined without any
deduction for delivery charges. Thus, the sales price of the rental is the total amount charged to
the customer, including any charges associated with the delivery of the tangible personal
property to and from the event location.
2.

Event services involving handling of the customer’s tangible personal property

When the Taxpayer provides services involving the handling of the customer’s own tangible
personal property, those services are not subject to the Tennessee sales and use tax.
The sales tax does not apply to all services; rather, it only applies to retail sales of those services
specifically enumerated by the statute.3 Ryder Truck Rental, Inc. v. Huddleston, 1994 WL
420911 (Tenn. Ct. App. Aug. 12, 1994). In particular, TENN. CODE ANN. § 67-6-205(c)(6)
(Supp. 2010) imposes the sales tax on the service of “the installing of tangible personal property
that remains tangible personal property after installation . . . where a charge is made for the
installation,” regardless of whether the installation is incident to the sale of the tangible personal
property or whether any tangible personal property is transferred in conjunction with the
installation service.
Thus, the Taxpayer’s services will be subject to Tennessee sales and use tax under TENN. CODE
ANN. § 67-6-205(c)(6) if the services can be characterized as: (1) the installation of tangible
personal property, (2) that remains tangible personal property, and (3) there is a charge for the

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The term “delivery charges” is defined under TENN. CODE ANN. § 67-6-102(27)(A) as “charges by the seller of
personal property or services for preparation and delivery to a location designated by the purchaser of personal
property or services, including, but not limited to, transportation, shipping, postage, handling, crating, and packing.”
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Note that even if a service is not specifically enumerated by the statute, the service may be subject to sales tax
where charges for the service are included in the sales price of a taxable good or service.

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installation.4 The first element is not met, as the Taxpayer does not install tangible personal
property. Neither the Tennessee Code nor the Tennessee courts have defined the terms “install”
or “installation” for purposes of Tennessee sales and use taxation. However, the Tennessee
Supreme Court has specifically stated that, because the Retailers’ Sales Tax Act does not contain
a definition of the term “installation,” the term must be given its ordinary and common meaning.
Eusco, Inc. v. Huddleston, 835 S.W.2d 576, 580 (Tenn. 1992). The Tennessee Supreme Court
has also generally stated that when a statute does not define a term, it is proper to look to common
usage to determine the term’s meaning. See, e.g., Tenn. Farmers Assur. Co. v. Chumley, 197 S.W.3d
767, 782-83 (Tenn. Ct. App. 2006); Beare Co. v. Tenn. Dep’t of Revenue, 858 S.W.2d 906, 908
(Tenn. 1993).
In common usage, the term “install” means “to set up for use or service.” MERRIAM-WEBSTER'S
COLLEGIATE DICTIONARY 648 (11th ed. 1995). Although not dispositive, courts in other
jurisdictions have also adopted this or a similar definition of the term. E.g., Cent. Me. Power Co.
v. Johnson, 263 A.2d 713 (Maine 1970) (defining the term “install” as “to set up for use or
service” for state taxation purposes).
However, this definition is overly general and vague. As a result, it is proper to consider what a
reasonably prudent person would consider “installation” in the context of sales and use taxation.
Under the common understanding, the concept of installation does not include a service in which
tangible personal property is both set up for use and removed in the context of a single event.
Therefore, tangible personal property that is set up for use for a single event with a defined
period of time and removed thereafter is not properly characterized as installation.
In this case, the Taxpayer provides a service in which the customer’s tangible personal property
is both set up for use and removed in the context of the customer’s event. The event is singular
and of a defined time period. Therefore, when the Taxpayer provides services involving the
handling of the customer’s own tangible personal property for a single event, the Taxpayer does
not install tangible personal property for the purposes of TENN. CODE ANN. § 67-6-205(c)(6). As
the Taxpayer’s service does not fall within the scope of any other section in the Retailers’ Sales
Tax Act describing taxable services, the Taxpayer’s service is not subject to the Tennessee sales
and use tax.5

4

The Taxpayer’s service does not fall within the scope of any other section in the Retailers’ Sales Tax Act
describing taxable services.
5

While not directly relevant, note that if the Taxpayer were selling taxable installation services, it would not be
exempt under TENN. COMP. R. & REGS. 1320-5-1-.21 (2008) (“Rule 21”). Rule 21 provides that “[w]arehousemen
and movers engaged in the business of moving, storing, packing and shipping tangible personal property belonging
to other persons render services, which are not subject to the Sales Tax.” However, the Taxpayer is not a mover
engaged in the business of moving tangible personal property belonging to others. Rather, as explained above, the
Taxpayer is primarily engaged in the business of staging events for its customers by setting up and removing tables,
chairs, and other items at the event location. Rule 21 therefore does not apply.

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Abigail Sparks
Tax Counsel

APPROVED:

Richard H. Roberts
Commissioner of Revenue

DATE:

7/22/11

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