ST 1999-06 - Service Station Canopies - June, 1999
This Information Release is being issued to announce a change
in the Department of Taxation's application of sales and use
tax to the erection of service station canopies. This change
is made in response to a recent decision of the Ohio Board of
Tax Appeals in F.
P. & E., Inc. v. Tracy (March 18, 1999), B. T. A.
Case No. 96-M-806.
Prior to this decision, the Department considered service
station canopies to be real property. Any person installing
service station canopies was considered a construction
contractor. As a contractor, the installer was the consumer
of all materials purchased for use in the performance of the
In the F. P. &
E. case, the Board of Tax Appeals determined that
service station canopies primarily benefit the business
conducted by the occupant of the realty rather than the
realty itself. The Board ruled that installed service station
canopies are business fixtures, within the meaning of section
5701.03(B) of the Revised Code. Therefore, they are to be
treated as tangible personal property, not realty.
The effect of this decision is to change the Department's
position on the application of sales and use tax. Since
service station canopies retain their status as tangible
personal property after they are installed, the sale and
installation of such canopies is subject to sales tax.
Persons who sell and install service station canopies should
be licensed as vendors and collect sales tax from customers
on the price of the canopies and the installation charge
unless the customer provides a valid exemption certificate.
For audit purposes, this interpretation will be applied to
all future transactions involving the sale and installation
of service station canopies. It will also be applied to any
past transactions if, at the time of the transaction, the
seller and installer of service station canopies neither
collected tax as a vendor nor paid tax as a construction
contractor. If a seller and installer of service station
canopies who paid tax as a construction contractor seeks a
refund of the tax paid on a past transaction, that person
will be expected to collect and remit tax from the consumer
unless the consumer has a valid claim of exemption.
For purposes of this release, "service station canopies"
include the canopies themselves, all electrical wiring for
the canopies, any appurtenances to the canopies, and any
concrete pads or islands used as foundations for the
canopies. All of these items primarily serve the business
conducted on the realty, rather than the realty itself.
Within the terms of the F. P. & E. decision,
all such items qualify as business fixtures under section
5701.03(B) of the Revised Code.
If you have any questions regarding this matter, you should
call us at 1-888-405-4039.
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