Georgia Sales Tax on Fixture Installation and Labor

By January 18, 2019 January 31st, 2019 Featured, Georgia Sales Tax, Sales Tax

Georgia Sales Tax Audit Fixture Installation and Labor

When it comes to Georgia sales tax audits and construction companies, there are 3 main questions:

  1. Is there sales tax on labor?
  2. Is there sales tax on installation?
  3. Is there sales tax on the labor of installing fixtures (A fixture is not a tangible item; it is considered real property)?

Sometimes, all 3 scenarios can be at play in a given transaction. We just completed a sales tax audit pertaining to a construction company that was being levied sales tax by an auditor on their labor. Labor is taxable when it comes as a part of creating a final tangible good for sale. The entire cost of the labor plus the tangible item is a taxable event, or a taxable sale.

However, there is a nuance to this law. What if what was created used as a fixture, and not just a tangible item?

Fixture:  Fixture means tangible personal property that has been installed or attached to land or to any building and is intended to remain permanently attached in its place. A consideration for other tangible property is a fixture is whether it removal would cause significant damage to such property or to the real property to which it is attached.

Since fixtures are considered real property, there is no sales tax on the labor involved in creating a fixture!

Georgia Sales Tax Audit Fixture Installation and Labor

Ansari Law Firm

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