When was an outdoor sign a taxable movable sale rather than an immovable construction for Louisiana sales tax?

Plain-English summary

Most outdoor signs were taxable movable property when they could be removed or replaced without substantial damage. This included many wall-mounted, pylon-mounted, billboard, and freestanding signs. Separately stated installation charges were not subject to sales tax.

Permanent foundations and sufficiently integrated monument structures could be immovable. In that case, the sign contractor paid tax on the construction materials rather than collecting retail sales tax on an immovable sign sale.

Building-mounted signs

A sign attached to a building remained movable if removal would not materially deface the building. The customer paid sales tax on the sign, while separately stated installation or attachment charges were excluded under La. R.S. 47:301(13)(a).

The ruling specifically treated “Halo Lit” and “Neon Channel” signs as movable because they could be removed without substantial building damage and commonly changed when a new enterprise occupied the property.

Pylon and billboard signs

Removable signage attached to a pylon was taxable even though the supporting columns were embedded in the ground. Civil Code article 466 treated permanently attached components differently from items that could be removed or replaced without substantial damage and were not commonly regarded as components.

The ruling separated parts of the system:

• A permanently installed pylon column or permanent frame could be immovable and outside retail sales tax.
• Replaceable sign faces and other materials changed with the user's identity were movable and taxable.
• If a self-contained sign-and-column system was designed to be removed, the movable system was taxable.
• If the entire movable portion was bolted to a base, that sign-and-column portion remained taxable.

The ruling applied the same analysis to billboards.

Monument signs were fact-specific

Some permanent signs were built on fixed foundations so that removing identifying material would destroy structural integrity. The ruling said most such monument signs could be immovable, but the result depended on size, integration with the soil, and permanency.

If immovable, the contractor owed use tax on materials incorporated into the construction. If the sign could be readily unbolted and carried away, it remained movable and the dealer collected tax on the retail sales price.

A permanent foundation and support could be immovable while removable sign panels attached to it remained taxable movable property.

Customer pickup of a manufactured sign

When a customer or hired installer picked up a completed sign at the manufacturing facility, the sign was movable at that transaction stage and its full price was taxable, even if it would later become part of an immovable.

That treatment assumed the manufacturer was not also installing the foundation, structure, and signage. Installation charges remained excluded when separately stated.

Freestanding signs and repairs

Signs on portable carts, easels, or other movable devices were taxable movable property. The supporting movable structure was subject to sales or lease tax as applicable.

Repairs to a movable sign were taxable under the ruling.

Sign manufacturer as construction subcontractor

When a sign manufacturer subcontracted to fabricate a sign incorporated into an immovable building project, the manufacturer acted as the contractor for the sign construction and paid sales tax on its materials.

In other transactions where the sign remained movable tangible personal property, the purchaser paid sales tax on the retail sign price, which included the fabrication materials.

What this means for you

Sign manufacturers and installers

Classify the sign and its components separately. A permanent foundation, removable face, and installation service may each receive different treatment.

Contractors

For an immovable sign, tax is generally paid on incorporated materials. For a movable sign, collect tax on the retail sale.

Property owners and advertisers

Do not assume attachment to a wall, pylon, or foundation makes the sign immovable. Removability and substantial damage were central to the ruling.

Common questions

Q: Were most wall-mounted business signs taxable?

A: Yes, if removable without materially defacing the building.

Q: Were separately stated installation charges taxable?

A: No.

Q: Was a pylon foundation taxable as a sign sale?

A: A permanently installed column or support could be immovable, while its removable signage remained taxable.

Q: Were monument signs always immovable?

A: No. The result depended on size, soil integration, permanency, and removability.

Q: What if the customer picked up the sign before installation?

A: The full manufactured sign was taxable as movable property at pickup under the ruling's assumptions.

Citations and references

• La. R.S. 47:301(13)(a) — separately stated installation outside sales price
• Louisiana Civil Code article 466 — component parts of buildings and other constructions
• Act 765 of the 2006 Regular Session — article 466 amendment discussed by the ruling
• McNamara v. Electrode Corp., 418 So. 2d 652 (La. App. 1st Cir. 1982), writ denied — size, soil integration, and permanency test
• Bailey v. Kruithoff, 280 So. 2d 262 (La. App. 2d Cir. 1973) — cited construction classification authority
• LAC 61:III.101(C) — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 07-004

Original ruling text

Revenue Ruling
No. 07-004
August 20, 2007
Sales and Use Tax
Taxation of Outdoor Signage
This revenue ruling addresses the applicability of the state sales taxes to the manufacture and sale of
outdoor signs and related questions.
Issues
What types of signs are subject to sales taxes, who pays the taxes, and when are taxes paid?
Analysis
Outdoor signage takes many forms, and is installed in various ways. Tax consequences are
dependent upon whether or not the sign can be considered movable or immovable.
Signs affixed to a building
Under the standards which determine whether property affixed to a building is movable or
immovable, a sign affixed to a building that can be removed without materially defacing the
building is classified as a movable. Therefore, the sale of the sign is subject to collection and
remittance of sales taxes. Charges for installing or attaching the sign to the building would be
exempt from tax under the definition of “Sales Price”, R.S. 47:301(13)(a), if separately stated on the
invoice.
Most signs, though affixed to a building with screws or compounds, will be considered movable.
“Halo Lit” signs and “Neon Channel” signs, though seemingly attached to a building or structure,
are capable of being removed without substantial damage to the building, and are changed
whenever a new enterprise occupies and makes use of the structure to which they are affixed.
Therefore, they are not considered immovable, and as movables, are subject to sales tax.
Signs placed on pylons
Signs placed on pylons as part of a sign package or as an individual sign are subject to sales taxes.
The pylons are imbedded into the ground, and the signage may be removed and/or replaced on the
pylon at will.
Act. No. 765 of the 2006 Regular Session amended Art. 466 of the Civil Code, altering the
application accorded things classified as "component parts" and "other things". The effect of this
legislation is to decrease the instances where property will be considered component parts or other
things because the breadth of property qualified as immovable is broader than that of the
replacement language of ‘buildings or other constructions’. The law is purported to not have
A Revenue Ruling is written to provide guidance to the public and to Department of Revenue employees. It is issued under
Section 61:III.101(C) of the Louisiana Administrative Code to apply principles of law to a specific set of facts. A Revenue
Ruling does not have the force and effect of law and is not binding on the public. It is a statement of the department's position
and is binding on the department until superseded or modified by a subsequent change in statute, regulation, declaratory
ruling, or court decision.

Revenue Ruling 07-004
Page 2 of 4
changed, but the application of the law does change.
Art. 466. Component parts of a building or other construction
Things permanently attached to a building or other construction are its component
parts.
Things such as plumbing, heating, cooling, electrical, or other installations are
component parts of a building or other construction as a matter of law.
Other things are considered to be permanently attached to a building or other
construction if they cannot be removed without substantial damage to themselves
or to the building or other construction or if, according to prevailing notions in
society, they are considered to be its component parts.
Under the new language of Art. 466, the Department would determine that because the signage may
be removed and/or replaced on the pylon at will, the signage itself is movable. Further, there are no
established prevailing notions in society that such signage would be a component part of the pylons.
Therefore, the sale of a sign which is erected by attachment to a pylon is subject to payment of sales
tax by the purchaser of the sign, and collection and remittance by the dealer.
The Department would describe a pylon sign as one which has as its base a single or double metal
column support permanently affixed to the ground. The column support of such a pylon sign would
not be taxable, as it is permanently installed/affixed to the ground. If the signage is a self-contained
system that is fabricated as a structure to be removed upon change of use, then the entire structure is
subject to sales tax. In the instance of the two or more column metal pylon sign, metal or other
permanent structure (frames, brackets, etc.) attaching the two columns would also be considered
part of the immovable, and not subject to sales tax, unless the entire sign system (everything
excluding the column) was designed to be removed at termination of the user identity’s use. Any
and all other materials that would be changed upon change of use would be considered subject to
sales tax. Installation of the signage would not be subject to sales tax if those charges are separately
stated on the invoice. If the column is permanently affixed to the sign, and the entire construction is
bolted to a base, then the entire portion that is movable, sign and column, is subject to sales tax.
The above analysis would also apply to signs known as “billboard” signs.
Permanent sign on a fixed foundation
Some signs are created and intended to be permanent and are constructed on a fixed foundation.
Removing the identifying information would destroy the sign’s structural integrity. Often, such
signs are termed monument signs. Examples include signs identifying churches, schools,
universities, etc. The foundation on the ground generally consists of a portion devoted to the
signage which is either bolted or otherwise attached to the underground portion of the foundation.
Other uses for monument signs are permanently installed sign structure that has slots to accept nonpermanent identifiers which are changed as the use of space changes. These are often commercial

Revenue Ruling 07-004
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multi-use properties that will house retail, medical, accounting, legal and other professional uses.
Other signs affixed to an underground foundation
The attachment of a sign to an underground foundation presents a more difficult problem. While
the sign might be changed and replaced from the underground foundation if it is merely bolted and
not welded, the attachment underground suggests that the sign is permanently attached to the
“construction” (foundation). Courts have recognized a three-part test for determining the question
of what is an ‘other construction’: (1) the size of the structure, (2) a certain degree of integration of
attachment to the soil, and (3) some degree of permanency. See, McNamara v. Electrode Corp.,
418 So.2d 652 (La. App.1 Cir. 5/25/1982) rehearing denied, writ denied, citing, Bailey v. Kruithoff,
280 So.2d 262 (La. App. 2nd Cir. 1973). Whether or not a ‘monument sign’ is movable or
immovable will turn on the specific facts. Therefore, it could be assumed that most ‘monument
signs’ would be immovable, and if so, use taxes would be owed by the contractor on the materials
used in construction of the sign. In any instance where a ‘monument’ sign would not be
immovable, such as if the sign could be readily unbolted and carried away, then the sale of the sign
would be taxable at the sales price with the dealer responsible for collection and remittance of sales
taxes at the sales price. Additionally, a monument sign might include only the monument structure,
that being a concrete or other foundation with metal supports for support of signage. As with the
pylon signs, if the metal supports are permanently attached to the foundation, then it is considered
immovable if the foundation is immovable. However, all signage that can be removed or unbolted
would be movable and subject to sales tax.
Delivered manufactured signs
When a manufactured sign destined for building wall installation, pylon or monument installation is
picked up by the customer at a manufacturing facility, it is by its nature movable, regardless of the
type of installation it is to become. In other words, regardless of whether or not it may become part
of an immovable, the property in its entirety is subject to sales tax. Further, whether or not the
purchaser or a hired installer picks up the sign, the entire amount of the construction is subject to
sales tax. The installation charges are not subject to sales tax. Necessarily, this analysis assumes
that the manufacturer is not installing the foundation, structure, and signage.
Free-standing or movable signs
The sale of “free standing” signs such as those mounted on portable carts, easels or other such
movable devices, are subject to collection and remittance of sales taxes. Any sign attached in any
manner to a movable device is characterized as movable property. The free standing movable
structure supporting the sign is subject to sales or lease tax, as the case requires.
Sign manufacturer is sub-contractor on construction project
Louisiana law requires the contractor of an immovable to pay sales taxes on the materials that are
incorporated into the construction of the immovable. Though a sign manufacturer can be sub-

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contracted by a construction contractor to fabricate a sign that will be installed on or into the
building under contract, for purposes of sales tax law, the sign manufacturer is the contractor for
construction of the sign, and must pay sales taxes on materials used in the construction of the sign
incorporated into an immovable. In all other circumstances where the sign is considered tangible
personal property, movable, the purchaser pays sales taxes on the sale of the sign. The retail sales
price of the sign incorporates the materials used in its construction. If the sign is movable, repairs
thereto are taxable.
Ruling
Most signs themselves, or the lettering that comprises the sign identification of a business or
enterprise, even when attached to the exterior wall of a structure, are considered movable and
subject to sales taxes. Many foundations used to support a sign are immovable, and if so, not
subject to sales taxes. Unless the sale of signage arises to the level of permanency associated with
the construction facts set forth for that of monument, pylon and billboard signs or structures, as
applicable, the sales of signs are tangible personal property and subject to sales taxes. Installation
charges, if separately stated on the invoice, are not subject to sales taxes

Cynthia Bridges
Secretary
By:

Johnette L. Martin
Attorney
Policy Services Division