Is the labor to erect and remove rented scaffolding at a job site taxable in Utah?

Plain-English summary

A company had always been charged sales tax on scaffolding-erection labor by its scaffolding vendors, but a new vendor told them not to charge tax on the labor portion. The vendor's scaffolding is company-owned equipment: it's delivered to the job site, assembled, used, then disassembled and hauled away when the job is done. The company asked the Commission which practice was correct.

The Commission sided with the original practice: the labor is taxable. Renting or leasing tangible personal property is a taxable transaction under § 59-12-103(1)(k), and because scaffolding is erected only temporarily, it stays classified as tangible personal property rather than becoming part of the building. When a rental contract anticipates delivery, set-up, and removal, those service charges are simply folded into the taxable rental charge — they aren't a separate, exempt "labor" transaction.

The Commission acknowledged one narrow carve-out: Rule R865-19S-78(a)(2) exempts separately stated charges for labor to install personal property to real property, even if the personal property stays personal property. But it explained why that carve-out almost never rescues scaffolding: scaffolding installations typically either stand entirely on their own or merely lean against/rest on a building for support with only minimal attachment — that's not the kind of "installation" to real property the rule contemplates. The rule also says on-site assembly alone (without actually affixing the property to real property) doesn't count as "installation" either. So in the rare case where scaffolding genuinely is attached to a building in a way that qualifies, only the separately stated attachment labor could be exempt — the delivery, general assembly, and disassembly charges remain taxable no matter what.

What this means for you

Scaffolding and temporary-structure rental companies

Charge sales tax on your full rental package — the equipment, plus delivery, set-up, and take-down — unless you can point to labor that is separately stated AND genuinely affixes the structure to the customer's real property (not just resting against it). That's an unusual fact pattern for scaffolding specifically.

Contractors renting scaffolding or similar temporary equipment

Don't assume a vendor telling you "no tax on labor" is correct — as this ruling shows, a vendor's practice can be wrong. If your scaffolding merely stands alone or rests against a structure without real attachment (the normal case), all of the rental, delivery, and labor charges are taxable.

Accountants and tax professionals

The controlling distinction is Rule R865-19S-78(a)(2)'s installation-to-real-property test, applied narrowly here: mere on-site assembly is explicitly excluded from "installation," and the temporary, minimally-attached nature of scaffolding makes the real-property exception a rare fit. Even where it fits, only the separately stated attachment labor — not delivery/assembly/disassembly — is exempt.

Common questions

Q: Is renting scaffolding taxable in Utah?
A: Yes, as a lease/rental of tangible personal property under § 59-12-103(1)(k).

Q: Are delivery, set-up, and take-down charges for scaffolding taxable?
A: Yes, when the rental contract anticipates those services, they're just part of the taxable rental charge.

Q: Is there any way scaffolding erection labor could be tax-exempt?
A: Only if the scaffolding is genuinely affixed/installed to real property and the installation labor is separately stated on the invoice — a rare scenario, since most scaffolding stands alone or merely rests against a structure.

Q: Can another scaffolding company rely on this ruling?
A: No — it binds the Commission only as to the taxpayer and facts presented. Confirm your own setup against current law.

Citations and references

Statutes:

• Utah Code Ann. § 59-12-103(1)(k) (lease/rental of tangible personal property is a taxable transaction)

Rules:

• Utah Admin. Rule R865-19S-78(a)(2) (separately stated installation-to-real-property labor is nontaxable; on-site assembly alone does not count as installation)

Source

• Landing page: https://tax.utah.gov/commission/rulings/
• Original PDF: https://files.tax.utah.gov/tax/commission/ruling/03-006.html

Original ruling text

REQUEST
LETTER

03-006

NAME

ADDRESS

Dear TAXPAYER REP,

In the past, our scaffolding companies have always charged a labor tax on their scaffolding.

We now have a new company doing the scaffolding and they informed me that they were told not to charge tax on labor.

They own all their materials and erect the scaffolding for the unit and then when the work is done, they tear it down and take it with them.

This letter is a request for a letter of ruling on this tax law.

Thank you for your prompt attention and cooperation in this matter.

NAME

COMPANY

RESPONSE
LETTER

April 14, 2003

NAME

ADDRESS

PHONE

RE: Request for Private Letter Ruling Concerning COMPANY Rental of Scaffolding

Dear NAME,

We have received your request for a private letter ruling concerning COMPANY rental of scaffolding. From your description, it appears that the companies with which you contract deliver scaffolding owned by them to the job site, assemble it, and then remove it at the end of the project. Concerning such transactions, you specifically ask if the cost of labor to erect and remove the scaffolding is taxable.

Transactions to lease or rent tangible personal property are taxable under Utah Code Ann. §59-12-103(1)(k). Because scaffolding is erected for only a temporary purpose, it is considered tangible personal property, the rental of which is taxable. Charges for delivery, set-up and removal of tangible personal property are merely part of the taxable rental charge when these services are anticipated by the rental contract.

However, there may be an occasion when a portion of the labor costs you describe could be nontaxable. Utah Admin. Rule R865-19S-78(a)(2) provides that "[s]eparately stated charges for labor to install personal property to real property are not subject to tax, regardless of whether the personal property becomes part of the real property." Accordingly, should scaffolding, which although it retains its character as personal property, be sufficiently attached to be considered "installed" to real property, any separately stated charges for the installation of the scaffolding would be nontaxable. Please note that the rule also provides that any "[o]n-site assembly that does not involve affixing the tangible personal property to real property is not installation within the meaning of the rule."

Nevertheless, because most scaffolding installations either "stand alone" or merely use the real property for support with minimal attachment, the erection of scaffolding would rarely be considered as having been installed to real property. Accordingly, it would be the unusual circumstance where the labor to "install" the scaffolding could be separately stated and be considered nontaxable. Even in such a circumstance, charges for labor to deliver, assemble and disassemble the scaffolding would remain taxable.

Please contact us if you have any other questions.

For the Commission,

Marc B. Johnson

Commissioner

MBJ/KC

03-006