The Wyoming Board of Equalization recently overturned a Wyoming Department of Revenue ruling that said the installation of large signs was a construction activity.
The taxpayer was a sign company that manufactured, sold, and installed large signs. The signs were installed over the entryways of retailers. The original ruling determined that the taxpayer was a contractor because the signs it installed were real property. This determination meant the taxpayer owed sales tax on all materials and supplies used to install signs.
For a sign to qualify as real property, the parties involved must intend that it become a permanent part of a structure. The Board of Equalization determined that the signs were not real property because (1) the parties involved understood that the signs would be removed if they were no longer needed, (2) they were designed to be easily removed, and (3) they did not provide value to subsequent tenants.