Colorado Issues Private Letter Ruling about Installing Custom-Made Closet Organizers

Monday, January 25th, 2016

 
 
Custom closet organizer.
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The Colorado Department of Revenue ("Department') issued a private letter ruling explaining the taxability of custom-made product installations.

The Department determined that separately stated fees for installing a custom-made closet organizer are taxable. The company that sells the organizers makes them to order for customers and assembles them onsite. The Department assumed that the company's charges for installation actually include the cost of installation and of assembly. Services performed in connection with the sale of custom-made items are generally taxable.

However, if the company separately stated its charges for assembly and installation, then the installation charges would likely not be taxable. When a buyer has a reasonable option to purchase a custom-made item without purchasing an installation service, then the Department does not tax installation charges.

https://www.colorado.gov/pacific/sites/default/files/Custom-Made%20Closet%20Organizer%20Private%20Letter%20Ruling%20PLR%2015-007.pdf


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