Installing a Fireplace
A contractor is making a real property improvement when selling an installed fireplace that is intended to become a permanent part of the building. The contractor's charge to the customer is not subject to tax. The contractor is the consumer of the materials used in making the real property improvement and must pay sales or use tax on the fireplace unit, bricks, mortar, and other materials that become part of the fireplace.
Selling a Freestanding Fireplace
A contractor's sale of a freestanding fireplace that does not become a permanent part of the building (e.g., table top unit, entertainment center insert) is the sale of tangible personal property. The contractor's total charge to the customer, including materials and labor, is subject to sales tax. The contractor may purchase the materials without tax, for resale, that it physically transfers to the customer in the sale of tangible personal property.
Repairing a Fireplace
A fireplace is treated as tangible personal property for purposes of service, maintenance, cleaning, or repair to the fireplace, regardless of whether the fireplace was a real property improvement or tangible personal property when installed. The contractor's charge for providing the service is subject to tax. The contractor may purchase the materials without tax, for resale, that it physically transfers to the customer.
Cleaning the chimney is a nontaxable service to real property. If the chimney cleaner charges a mandatory fee to clean soot that is in the fireplace as a result of the cleaning or other service to the chimney, that fee is part of the chimney cleaning service (i.e., not subject to tax). For example, if the chimney is scrubbed to remove soot, and soot falls down from the chimney into the fireplace, the mandatory charge for cleaning/removing this soot from the fireplace is part of the service of cleaning the chimney (i.e., not subject to tax).
February 6, 2018