The service of moving tangible personal property from one location to another, by itself, is not a service subject to Wisconsin sales and use tax. However, charges for disassembling, reassembling, and repair services to tangible personal property are taxable.
Disassembly and reassembly charges that are provided with the sale of moving services are part of the sales price of the moving services if (a) the primary objective of the customer is to have the property moved from one location to another, and (b) the disassembly and reassembly charges are not separate and optional charges to the customer.
The following examples illustrate the tax treatment of moving services:
Example 1: Contractor is hired by Roofing Company to move a pallet of shingles from the ground to a rooftop. No property is sold and no other service is performed by Contractor to Roofing Company. Contractor is providing a nontaxable service.
Example 2: Moving Company is hired to move Business' office equipment from its current location to a new office location across town. Moving Company moves file cabinets, copiers, printers, desks, chairs, and boxed office supplies. Moving Company charges Business for the amount of time and mileage it takes it to move the furniture across town. Moving Company is providing a nontaxable moving service and its charge to Business is not subject to Wisconsin sales and use tax.
Example 3: Moving Company is hired to move Business' office equipment from its current location to a new office location across town. Moving Company moves bookcases, desks, and other office furniture. Moving Company will, for a separate and optional fee, disassemble the furniture at the old location and reassemble the furniture at the new location to protect the furniture from damages. Business pays the additional fee for the additional care of its furniture. The charge for the moving services is not subject to sales tax. However, the separate and optional charge for disassembling and reassembling the furniture is subject to Wisconsin sales and use tax as a service to tangible personal property (i.e., the furniture).
Example 4: Same as
Example 3, except that the charge for disassembly and assembly of furniture is not an optional fee. Moving Company's contract provides that Moving Company's employee will determine whether the furniture needs to be disassembled in order to effectively move the property. The employees disassemble the bookcase and desk and reassemble them after the move. Moving Company's invoice to Business shows a separate charge for the disassembly and reassembly of the bookcase and desk. Since the service of disassembling and reassembling the furniture was not an optional service, it is not a separate sale from the moving service. The primary purpose of the transaction is to move the furniture; therefore, the entire invoice (including the mandatory charge for the disassembly and reassembly services) is not taxable.
Example 5: Appliance Store sells a refrigerator to Customer. Customer may choose to pay an additional fee for delivery and installation (remove packaging, hookup water lines, etc.). The sale takes place when Customer receives the installed refrigerator; therefore, the total amount of the sale, including delivery and installation, is subject to sales tax.