Are window coverings like blinds, drapes, and plantation shutters subject to Utah sales tax when sold with installation, and does it matter which type of covering it is?

Plain-English summary

A window covering manufacturer/retailer — selling drapery, blinds, and plantation shutters, and also contracted to install blinds for a large home-improvement chain's customers — wrote in frustrated by what it saw as unfair competition. The business had been collecting sales tax on all its window coverings, including plantation shutters, but had learned that the big-box competitor was telling customers that "installed products" (blinds, carpet, cabinets, water heaters, countertops, window coverings, etc.) don't require sales tax at all, as long as the customer paid for installation. A separate informal conversation with a taxpayer representative had also told the business that only plantation shutters should be tax-exempt (as real property once permanently attached), while blinds, pleated shades, and other removable coverings should still be taxed. Losing sales to competitors quoting lower, tax-free prices on plantation shutters, the business asked the Commission to sort out the actual rule.

The Commission's answer rejected the competitor's blanket "no tax if installed" claim and confirmed a more nuanced, item-by-item framework:

General principles first:

• If the sales price for a window covering does not separately include installation, the whole transaction is a taxable sale of tangible personal property — full stop, regardless of whether the buyer or someone else later installs it. Any vendor who fails to collect required tax can be held liable for it — this applies just as much to large chains as to small businesses, directly rebutting the "installed products are automatically tax-free" sales pitch.
• If installation labor is separately invoiced, that labor charge is nontaxable — but whether the covering itself is taxable depends entirely on whether it becomes part of the underlying real property upon installation.

The real-property-vs-personal-property split, applied item by item:

• Custom-built plantation shutters generally become part of the realty. They're typically built to fit a specific window opening, are relatively difficult to remove once installed, and are unlikely to be moved to another home. Result: neither the shutters nor their installation is taxable to the customer — instead, the installing real property contractor pays sales tax on the price they paid their own supplier for the materials.
• Fabric curtains and drapes have historically been treated as remaining personal property after installation, even when custom-made, because they're usually hung on curtain rods that are themselves easy to install and move. Result: the vendor collects sales tax on the curtains/drapes/rods (but not on separately stated installation labor), and can buy the items tax-free from its own supplier under the resale exemption.
• Non-customized blinds and shades similarly stay personal property, since the way they're attached doesn't convert them to real property and they can be reused in other locations without significant modification.
• Custom-made pleated shades and blinds are the genuinely hard case, with no bright-line rule. The Commission's guidance: the more customization required to fit a specific window opening, the more likely the item has become part of the underlying realty. Relevant factors across all categories include how the covering is physically affixed, whether it's likely to stay in place for the product's whole life, and how much customization went into producing it.

The Commission candidly acknowledged "a certain amount of subjectivity" in classifying custom-made window coverings, but gave the requester (and anyone in the industry) a workable framework rather than a rigid list.

What this means for you

Window covering manufacturers and retailers

Sort your product line by the real-property test, not just by "does the customer pay for installation." Custom plantation shutters generally qualify as converted real property (you pay tax on materials, customer pays nothing extra); drapes, curtains, and non-custom blinds/shades stay personal property (you collect tax on the item, not on separately stated labor). Custom pleated shades/blinds require a case-by-case judgment based on customization level and removability.

Businesses competing against large retailers claiming "installed = tax-free"

This ruling directly confirms that claim is false as a blanket rule — a large retailer is subject to exactly the same real-property-vs-personal-property analysis as any other vendor, and can be held liable for uncollected tax on items that don't actually convert to real property (like blinds).

Contractors installing custom window treatments

If you're installing genuinely custom-fitted plantation shutters, you're likely the real property contractor responsible for paying tax on your own materials purchase — not collecting tax from your customer. For drapes, curtains, and standard blinds, the roles reverse: you (or the retailer) collect tax on the item, and separately stated installation labor stays untaxed.

Common questions

Q: Are plantation shutters exempt from Utah sales tax?
A: Custom-built plantation shutters generally become part of the real property upon installation, making the sale and installation nontaxable to the customer — the installing contractor instead pays tax on the materials cost.

Q: Are blinds and drapes taxable even when custom-made?
A: Usually yes — drapes, curtains, and most blinds/shades stay tangible personal property because they're easily installed/removed and reusable, so the vendor collects tax on the item (though not on separately stated installation labor).

Q: Is it true that "installed products" are automatically tax-free, as a competitor claimed?
A: No. The Commission specifically rejected this blanket claim — taxability depends on whether the specific item converts to real property, not simply on whether installation is part of the deal.

Q: How is a custom pleated shade or blind classified?
A: There's no bright-line rule — the more customization required to fit a specific window, the more likely it's treated as converted real property, but this is evaluated case by case.

Q: Can a large retailer be held liable for not collecting sales tax on items it claims are "installed and therefore exempt"?
A: Yes. Any vendor who fails to collect sales tax required under Utah law — regardless of size — may be held liable for that tax.

Q: Does this ruling apply to my window covering business?
A: Not automatically. This is a private letter ruling binding only on the Commission as to this taxpayer's specific facts. It can't be relied on as binding by anyone else, though it may carry weight if your facts closely match.

Citations and references

Statutes and rules:

• Utah Admin. Rule R865-19S-78(A)(2) (separately invoiced installation labor nontaxable when property remains tangible personal property)

Source

• Landing page: https://tax.utah.gov/commission/rulings/
• Original PDF: https://files.tax.utah.gov/tax/commission/ruling/03-003.pdf

Original ruling text

REQUEST LETTER

03-003

NAME

ADDRESS

PHONE

Dear TAXPAYER REP,

Recently, I was speaking to TAXPAYER REP in regards to some questions I have concerning the collection of sales taxes on products that our business is selling. He instructed me to write you a letter to get a private letter ruling. I would like to have a ruling to the questions, and concerns that I have.

We are in the window covering business. We manufacture all of our own drapery treatments. We also sell all types of blinds, as well as plantation shutters. Over the years, we have been collecting sales tax on all of these items. We also have a contract with COMPANY to install blinds for them that they have sold to their customers.

On several occasions, it has been brought to our attention that the COMPANY customers do not have to pay sales tax on their blinds when they have them installed by us. They are not paying sales tax on the purchase of the blinds, or on the cost of the installation. COMPANY sales pitch is, "As long s the customer pays to have their product installed, there is no sales tax." We have specifically asked COMPANY about this, and they have confirmed that if the customer purchases any item from COMPANY that is considered an installed product, that they do not have to charge the customer sales tax. This is true on items such as carpet, cabinets, water heaters, window coverings, counter tops, etc.

After taking to TAXPAYER REP, he indicated that the only thing that, we in the window covering business, should not have to pay sales tax on is plantation shutters. He said that this is because the shutters are permanently attached to the home, thus becoming "real property". He explained that items like vertical blinds, pleated shades, mini blinds, 2" blinds, etc., should be taxed because they are not attached to the wall permanently, and they can be removed.

We are a firm believer in good fair competition, but when the competition becomes unfair, it doesn't sit easy with us. If the larger corporations, such as the COMPANY of the world, aren't required to pay sales tax on the same items that we are, this is obviously not fair. They are automatically granted a 6.5% advantage over companies like ours. I can only imagine the substantial amount of money that could be generated in the State if COMPANY had to play by the same rules as everyone else.

We have been collecting sales tax on all window treatments, including the plantation shutters that TAXPAYER REP is saying we don't have to. This also have been a sore spot for us, especially recently. There is becoming a much larger demand for the plantation shutters. In the past 2 week alone, we have been told by customers who have purchased plantation shutters from COMPANY, COMPANY, COMPANY, COMPANY, and COMPANY, that they have purchased the shutters from these vendors because their prices were lower than ours. We have seen the actual invoices, and the difference in the price is because these vendors are not charging the customers sales tax on the plantation shutters. All of the customers have been told that they are not required to pay sales tax on shutters. Is this true? Do we take TAXPAYER REP advice and collect sales tax on all window coverings with the exception of shutters? If so, how do we get the COMPANY of the world to collect sales tax on all of the installed products that they offer?

Also, we have been told by the State that if when we sell window coverings, that we need to collect sales tax on the item sold, and that the installation part of the sale is not taxable. In other words, if the total sales price including installation was $1,000.00, and the installation might be $200.00, that the only part of the sale that is taxable is the $800.00. If you could please clarify and send us a ruling on this issue, I would appreciate it.

Thank you for your help in this matter. We would appreciate it if you could send us rulings on these issues as soon as possible. Our business is a highly competitive one, and we need to have answers right away. If you need to talk to me personally about these issues, please feel free to call me at ######.

Sincerely,

NAME

Owner

RESPONSE LETTER

April 15, 2003

NAME

ADDRESS

RE: Private Letter Ruling — Taxation of Window Coverings

Dear NAME,

We have received your request for a private letter ruling concerning the taxation of window coverings. From your letter, it appears that you sell and install various coverings, including blinds, draperies, and plantation shutters. Before discussing whether a particular window covering becomes real property or remains personal property after its installation for taxation purposes, some general information may be helpful to address several of your remarks.

First, if any Utah vendor, whether your company or a nationwide home improvement store, sells blinds, draperies, or plantation shutters and the sales price does not include installation, the sale is deemed to be the sale of tangible personal property. The sale is taxable whether the purchaser then hires another party to convert the items to real property or does so himself. Should a vendor not collect the sales tax required under Utah law, the vendor may be held liable for the tax.

Second, if the sales price for a window covering includes labor for installation, any separately invoiced labor cost is nontaxable. However, the taxation of the coverings themselves depends on whether or not the window treatment is converted to the underlying realty.

If the window treatment is considered to become part of the realty after its installation, both the price of the window treatment and its installation are nontaxable. In this case, the real property contractor would pay sales tax on the price paid to the supplier for the window covering. The same applies even if the real property contractor subcontracts the installation labor out to a third party.

If the window covering remains personal property after its installation to real property, however, the vendor should collect sales tax only on the price of the window covering, not on the price of installing it to the real property. Utah Admin. Rule R865-19S-78(A)(2). In this case, the vendor may purchase the window treatment tax-free from the supplier, pursuant to the sale for resale exemption.

In applying these principles, it is critical to know whether a window covering becomes part of the realty, upon installation, or whether it remains tangible personal property. Such a determination depends on a number of factors, including how the covering is affixed to the underlying realty, whether it is likely to remain in place for the life of the product, and the degree of customization required for it to be produced.

Custom-built plantation shutters would generally be deemed part of the realty after their installation because they are usually built to accommodate a specific window opening, are relatively difficult to remove once installed, and are unlikely to be moved to another home. Accordingly, a real property contractor who sells such plantation shutters and their installation would not charge sales tax on that transaction, but would pay tax on his or her purchase price of the materials.

On the other hand, fabric curtains and drapes have historically been deemed to remain personal property after their installation, even if they are custom-made. They are usually easily installed on curtain rods that are themselves relatively easy to install and to move from place to place. Accordingly, any vendor selling such a window covering should collect sales tax on the sale of the curtains and drapes and rods, but not on the labor costs for installation. Other non-customized blinds and shades would also be deemed to remain personal property after installation because the method of affixture is insufficient to convert them to real property and because the treatment can be used in other venues without significant modification or difficulty. Of course, in contrast to plantation shutters, the vendor would not have to pay sales tax on his or her purchases from the supplier on these items.

The classification of custom-made pleated shades and blinds is more difficult to determine, depending upon how much customization is required to produce them, how likely it is that the items will be moved to another window, and how difficult it is to install and remove them after installation. There is no bright line by which to denote which items become real property versus those that remain personal property. In general, the more customization required to fit a product to a specific window, the more likely the window treatment has become part of the underlying realty after its installation.

We realize there is a certain amount of subjectivity in determining whether or not custom-made window coverings become part of the underlying realty upon installation. Hopefully, this response offers you some guidance. Should you have any other questions, please contact us.

For the Commission,

Marc B. Johnson

Commissioner

MBJ/KC

03-003