Were labor to assemble or reconfigure modular office furniture and charges for refurbishment, disassembly, repair, handling, and transportation taxable?

Plain-English summary

The Comptroller treated labor that assembled component parts into a finished product as the taxable final stage of manufacturing. Putting modular-furniture pieces together into a usable product was not “installation,” which the letter defined as setting a finished product in place.

Assembly labor was taxable whether the provider sold the furniture or the customer already owned it. Labor to reassemble furniture into a new configuration was also taxable.

Refurbishment was taxable. The letter said the total charge for repair, restoration, and remodeling had been taxable since October 2, 1984, including disassembly, reassembly, repair, handling, transportation, or mileage.

What this means for you

The historical letter distinguished assembling component parts from merely setting an already finished product in place. It does not actually decide a charge for only moving finished furniture, despite that phrase in the STAR caption.

Common questions

Was initial assembly of modular furniture taxable? Yes.

Did customer ownership change the assembly result? No. Assembly of furniture sold by the provider or owned by the customer was taxable.

Was reconfiguration taxable? Yes, when the furniture was reassembled into a new configuration.

What did taxable refurbishment include? Disassembly, reassembly, repair, handling, transportation, and mileage within the total charge.

Did the body say merely moving furniture was nontaxable? No. That claim appears only in the STAR caption.

Citations and references

• No statute or administrative rule is cited in the letter text.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8712L0883E11

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller December 16, 1987

Dear ****:

Thank you for your letter concerning the taxability of installation,
reconfiguration and refurbishment of modular office furniture.

The labor to assemble component parts into a finished product is taxable
as
the final stage of the manufacturing process. Assembling pieces of
modular
furniture into a finished, usable product is not considered
"installation",
which is defined as setting a finished product in place. The labor to
assemble furniture which you sell or which belongs to the customer is
taxable
as is the labor to reassemble furniture into a new configuration.

Refurbishment is a taxable service. The total charge for repair,
restoration
and remodeling has been taxable since October 2, 1984. This includes
charges
for disassembly, reassembly, repair, handling and transportation or
mileage.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call our
toll-free
number 1-800-531-5441. The regular number is 512/463-4600. You may
write me
at the Tax Policy Division.

Sincerely,
Julie Pesl
Tax Policy Division