Tenn. Comp. R. & Regs. 1320-05-01-.41
Where persons contract to fabricate articles of tangible personal property from materials selected or furnished by customers, the total proceeds from the sale are subject to the Sales or Use Tax. Such persons may not deduct labor or service charges of fabrication or production, notwithstanding that such charges may be separately billed to customers apart from charges for materials. Charges made for labor and other services to install tangible personal property which has been fabricated, and which remains personal property after installation, are subject to tax. Charges made for labor and other services to install such property which becomes real property are not subject to the Sales or Use Tax if such charges are billed separately on an invoice given to the customer at the time of the sale
Tenn. Comp. R. & Regs. 1320-05-01-.41
Authority: T.C.A. §§ 67-1-102 and 67-6-402.