Rules & Regulations of the State of Tennessee
Title 1320 - Revenue
Subtitle 1320-04 - Miscellaneous Tax Division
Chapter 1320-04-05 - Business Tax Rules and Regulations
Section 1320-04-05-.21 - INSTALLATION SALES

(1) Tangible personal property which is sold and attached to real property, but which is ordinarily removed by the owner or tenant, such as window air conditioning units, curtain and drapery rods, gasoline pumps, etc., shall be deemed to be personal property. Charges for installing tangible personal property as a part of and in connection with the sale of tangible personal property are subject to the business tax if the property continues to be personal property after installation. The tax is due from the person making the sale of personal property regardless of whether the property is installed by that person or by another person acting for him. The tax shall be computed based on the dominant business activity of the person making the sale of the personal property. Persons making charges for installing personal property not as a part of and in connection with the sale of the tangible personal property shall be taxed under classification four (4) of the business tax.

(2) Charges made for installing tangible personal property which becomes a part of real property, and which is not ordinarily removed by the owner or tenant, such as carpeting, electrical wiring, etc., shall be deemed to be made by a contractor, and the person installing such property shall pay the appropriate Business Tax as a contractor.