Do security services include the installation of the security system wires and monitoring equipment?
A. No. However, all security system wires and equipment (parts) that are annexed must be taxed based on the installer’s contractor option. Charges for contractor labor to install the security system may be taxable. See the notice titled “New Sales Tax Laws Affecting Contractors Beginning July 1, 2006.” All security system wires and equipment (parts) that are installed and remain tangible personal property after installation are retail sales, and the total amount charged for such items and installation is subject to sales tax. If the installation of a security system involves the installation of both tangible personal property and building materials that are annexed for one contract amount, the total contract amount (materials and labor) is subject to sales tax.
No. However, all security system wires and equipment (parts) that are annexed must be taxed based on the installer’s contractor option. Charges for contractor labor to install the security system may not be taxable. If the parts that are installed remain tangible personal property after installation, the total amount charged for the parts and installation labor are taxable. If the parts become annexed, an Option 1 contractor is required to collect sales tax on the total amount charged for the parts and labor unless the labor charge is separately stated. If the parts become annexed, an Option 2 or Option 3 contractor will not collect any sales tax on the amount charged for the parts and labor.
