Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 219 - Sales and Use Tax on Construction Activities › Rule 701-219.11 - Distinguishing Machinery and Equipment From Real Property

Current through Register Vol. 47, No. 3, July 24, 2024
A construction contract may include many activities, but it
				  does not include a contract for the sale and installation of machinery or
				  equipment. Machinery and equipment includes property that is tangible personal
				  property when it is purchased and remains tangible personal property after
				  installation. Generally, tangible personal property can be moved without
				  causing damage or injury to itself or to the structure, it does not bear the
				  weight of the structure, and it does not in any other manner constitute an
				  integral part of a structure. For exemptions related to the sale of computers,
				  machinery, and equipment if the sale occurs as part of a contract entered into
				  on or after July 1, 2016, see rules 701-230.14 (423) to 701-230.22
				  (423).
(1) The following is a list of
				property that, under normal conditions, remains tangible personal property
				after installation. The list is nonexclusive and is offered for illustrative
				purposes only:
a. Furniture, radio and
				television sets and antennas, washers and dryers, portable lamps, home
				freezers, portable appliances and window air-conditioning units.
b. Portable items such as casework, tables,
				counters, cabinets, lockers, athletic and gymnasium equipment, and other
				related easily movable property attached to the structure.
c. Machinery, equipment, tools, appliances,
				and materials used exclusively as such by manufacturers, industrial processors
				and others performing a processing function with the items, including:
(1) Computers, machinery, and equipment
				directly and primarily used in processing by a manufacturer (see rule
				701-230.15 (423)).
(2) Computers,
				machinery, and equipment directly and primarily used to maintain the integrity
				of the product or to maintain unique environmental conditions required for
				either the product or the computers, machinery, and equipment used in
				processing by a manufacturer (see rule 701-230.16 (423)).
(3) Computers, machinery, and equipment
				directly and primarily used in research and development of new products or
				processes of processing (see rule 701-230.17 (423)).
(4) Computers used in processing or storage
				of data or information by an insurance company, financial institution, or
				commercial enterprise (see rule 701-230.18 (423)).
(5) Computers, machinery, and equipment
				directly and primarily used in recycling or reprocessing of waste products (see
				rule 701-230.19 (423)).
(6)
				Pollution-control equipment used by a manufacturer, including but not limited
				to that required or certified by an agency of Iowa or the United States
				government (see rule 701-230.20 (423)).
d. Office, bank, and savings and loan
				association furniture and equipment, including office machines.
e. Radio, television, and cable television
				station equipment, but not broadcasting towers.
f. Certain equipment used by restaurants and
				in institutional kitchens; for instance, dishwashers, stainless steel wall
				cabinets, stainless steel natural gas stoves, stainless steel natural gas
				convection ovens, and combination ovens and steamers with stands. This
				paragraph is not applicable to similar items used in residential kitchens. See
				Petition of Taylor Industries Inc. (Dkt No. 94-30-6-0367,
				3-14-95).