Is the charge to install a household appliance subject to Tennessee sales tax, and does it matter whether the appliance is free-standing or built-in?

Plain-English summary

The taxpayer is a major household-appliance manufacturer that sells appliances to Tennessee residents and to landlords, charging sales tax on the appliances themselves. It also contracts with a third party to install the appliances and bills a separate installation charge. The question: is that installation charge subject to Tennessee sales tax? This is a Revenue Ruling — advisory and not binding even on the Department.

The rule: it depends on whether the appliance stays personal property or becomes a fixture.

• If the appliance remains tangible personal property after installation → the installation charge is taxable.
• If the appliance becomes affixed to the real property (a fixture) → the installation charge is not taxable.

Why. Tennessee taxes the installation of "tangible personal property that remains tangible personal property after installation" as a specifically enumerated service (§ 67-6-205(c)(6); Rule 1320-05-01-.27(1)) — the tax is owed by the dealer, whether the dealer or someone on its behalf does the install. But installing property that becomes part of real property is not a taxable service (Rule 1320-05-01-.27(4)); that's treated as a real-property improvement. In that case the installer/contractor owes use tax on the materials it buys and uses (§ 67-6-209(b)) — unless the property was already taxed. Here the customers already paid sales tax on the appliances, so the installer owes no use tax on the appliances themselves, but it does owe tax on other materials it buys to perform the installation.

The fixture test. Whether an item becomes part of the realty is decided under Tennessee's law of fixtures, which turns on the intent of the parties, shown by both objective and subjective factors:

• Mode of attachment — how invasively it's connected;
• whether removal would seriously damage the building; and
• whether removal would destroy the item's essential character as personal property.

Tennessee courts have applied this many ways: grain bins bolted to a concrete pad stayed personalty (Harry J. Whelchel Co. v. King); a large ornamental gate on a concrete footing stayed personalty (Keenan v. Fodor); portable branch-bank buildings stayed personalty (Hubbard v. Hardeman County Bank); but tackless-strip carpet became realty (General Carpet Contractors v. Tidwell), as did a conveyor system whose removal would damage the building and destroy the system (Process Systems, Inc. v. Huddleston) and large permanent greenhouses (Hermann Holtkamp Greenhouses).

How the appliances sorted out.

• Remain personal property → installation TAXABLE: washing machines, dryers, free-standing refrigerators, free-standing range/ovens, and free-standing icemakers. These just connect to power and/or water, install after the home is built, and lift out without damaging the home or losing their character as appliances.
• Become fixtures → installation NOT taxable: dishwashers, built-in refrigerators, built-in microwaves, built-in range/ovens, built-in icemakers, and electric and gas cooktops. These are set into custom cabinetry or countertops and/or hardwired into the home's wiring, are meant to stay for the appliance's useful life, and can't be removed without significant labor or damage.

What this means for you

Appliance sellers, installers, and retailers in Tennessee

Whether you charge sales tax on an installation charge depends on the appliance, not the dollar amount. Free-standing units that simply plug in or connect to a water line stay personal property — charge sales tax on the installation. Built-in/hardwired units set into cabinetry or countertops become fixtures — don't charge sales tax on the installation, because installing real-property improvements isn't a taxable service.

Watch the contractor's-use-tax flip side

When you're installing an appliance that becomes a fixture, you're treated like a contractor improving real property. You owe use tax on the materials you buy and use for the job (§ 67-6-209(b)) unless those items were already taxed. If your customer already paid sales tax on the appliance, you won't owe use tax on the appliance itself — but you can still owe tax on incidental materials (fittings, supplies) you purchase to do the install.

Separately stating the install doesn't change the answer

The taxability of installation labor here flows from the fixture/personalty classification, not from whether the charge is itemized. Itemizing a nontaxable (fixture) installation doesn't make it taxable, and itemizing a taxable (personalty) installation doesn't make it exempt.

Accountants and tax professionals

Taxable installation of property that remains personalty: § 67-6-205(c)(6) and Tenn. Comp. R. & Regs. 1320-05-01-.27(1); nontaxable installation of property that becomes realty: Rule 1320-05-01-.27(4), with the contractor's use tax at § 67-6-209(b). Definitions: "tangible personal property" § 67-6-102(89)(A); "retail sale" § 67-6-102(76); "sale" § 67-6-102(78)(A); "sales price" § 67-6-102(82); "purchase price" § 67-6-102(75). Fixture analysis: General Carpet Contractors, Inc. v. Tidwell, 511 S.W.2d 241 (Tenn. 1974); Magnavox Consumer Elecs. v. King, 707 S.W.2d 504 (Tenn. 1986) (quoting Hickman v. Booth, 173 S.W. 438 (Tenn. 1914)); Harry J. Whelchel Co. v. King, 610 S.W.2d 710 (Tenn. 1980); Hubbard v. Hardeman County Bank, 868 S.W.2d 656 (Tenn. Ct. App. 1993); Memphis Housing Authority v. Memphis Steam Laundry-Cleaner, Inc., 463 S.W.2d 677 (Tenn. 1971); Process Systems, Inc. v. Huddleston, 1996 WL 614526 (Tenn. Ct. App. 1996); Green v. Harper, 700 S.W.2d 565 (Tenn. Ct. App. 1985); Keenan v. Fodor, 2012 WL 3090303 (Tenn. Ct. App. 2012); Hermann Holtkamp Greenhouses, Inc. v. Metro. Nashville, 2010 WL 366697 (Tenn. Ct. App. 2010).

Common questions

Q: Do I charge sales tax to install a washer, dryer, or free-standing refrigerator?
A: Yes. Those appliances remain tangible personal property after installation, so the installation charge is a taxable service under § 67-6-205(c)(6).

Q: What about a dishwasher, built-in oven, or cooktop?
A: No sales tax on the installation. Those become fixtures (affixed to the realty), and installing real-property improvements is not a taxable service.

Q: How do I tell whether an appliance becomes a fixture?
A: Apply Tennessee's fixture test: the parties' intent, shown by how invasively it's attached, whether removing it would seriously damage the building, and whether removal would destroy its character as a movable appliance. Built-in/hardwired units set into cabinetry or countertops generally become fixtures; free-standing units that plug in or connect to a hose generally don't.

Q: I'm installing built-in appliances — do I owe any tax as the installer?
A: You owe use tax on materials you buy and use for the job (§ 67-6-209(b)) unless they were already taxed. If the customer already paid sales tax on the appliance, you won't owe use tax on the appliance itself.

Q: Can I rely on this ruling?
A: Not as binding. This is a Revenue Ruling — advisory only and not binding even on the Department, and not on other taxpayers. Confirm your own facts with a tax professional.

Citations and references

Tennessee statutes (Tenn. Code Ann.):
- § 67-6-205(c)(6) (installation of property that remains tangible personal property is a taxable enumerated service)
- § 67-6-209(b) (contractor's use tax on property used to perform a contract, unless already taxed)
- § 67-6-102(89)(A) ("tangible personal property"); § 67-6-102(76) ("retail sale"); § 67-6-102(78)(A) ("sale"); § 67-6-102(82) ("sales price"); § 67-6-102(75) ("purchase price")

Regulation:
- Tenn. Comp. R. & Regs. 1320-05-01-.27 (Rule 27): (1) installing property that remains personalty is taxable; (4) installing property that becomes part of realty is not taxable (installer liable for tax on property bought/used)

Case law (law of fixtures):
- General Carpet Contractors, Inc. v. Tidwell, 511 S.W.2d 241 (Tenn. 1974); Magnavox Consumer Elecs. v. King, 707 S.W.2d 504 (Tenn. 1986); Hickman v. Booth, 173 S.W. 438 (Tenn. 1914)
- Harry J. Whelchel Co. v. King, 610 S.W.2d 710 (Tenn. 1980); Hubbard v. Hardeman County Bank, 868 S.W.2d 656 (Tenn. Ct. App. 1993); Memphis Housing Authority v. Memphis Steam Laundry-Cleaner, Inc., 463 S.W.2d 677 (Tenn. 1971)
- Process Systems, Inc. v. Huddleston, 1996 WL 614526 (Tenn. Ct. App. 1996); Green v. Harper, 700 S.W.2d 565 (Tenn. Ct. App. 1985); Keenan v. Fodor, 2012 WL 3090303 (Tenn. Ct. App. 2012); Hermann Holtkamp Greenhouses, Inc. v. Metropolitan Nashville & Davidson County, 2010 WL 366697 (Tenn. Ct. App. 2010)

Source

• Landing page: https://www.tn.gov/revenue/tax-resources/legal-resources/tax-rulings.html
• Original PDF: https://www.tn.gov/content/dam/tn/revenue/documents/rulings/sales/20-11.pdf

Original ruling text

Revenue rulings are not binding on the Department. This ruling is based on the particular facts
and circumstances presented and is an interpretation of the law at a specific point in time. The
law may have changed since this ruling was issued, possibly rendering it obsolete. The
presentation of this ruling in a redacted form is provided solely for informational purposes and
is not intended as a statement of Departmental policy. Taxpayers should consult with a tax
professional before relying on any aspect of this ruling.

The application of the Tennessee sales and use tax to the installation of household appliances.

Revenue Rulings are statements regarding the substantive application of law and statements of
procedure that affect the rights and duties of taxpayers and other members of the public. Revenue
Rulings are advisory in nature and are not binding on the Department.

The Taxpayer is a major manufacturer of household appliances. As part of its business activities in
Tennessee, the Taxpayer sells appliances to residential customers, as well as building owners renting
or leasing residential property units (collectively, the “End Users”). The Taxpayer charges the End Users
Tennessee sales tax on all appliance sales.
The Taxpayer contracts with a third party to install appliances for End Users and the Taxpayer’s
invoices include a separate line item installation charge. The specific household appliance types
(collectively, the “Appliances”) manufactured by the Taxpayer and subsequently installed in the End
Users’ residential properties are as follows:
•

Washing Machines and Dryers. The installation of the Taxpayer’s washing machines and
dryers typically involves placement of the appliance on a flat surface for connection of the
standpipe, which is followed by the connection of supply hoses, power cords, and dryer
venting.

•

Dishwashers. The installation of dishwashers manufactured by the Taxpayer includes the
cutting of a hole for water supply and discharge, the connecting of the water lines, followed
by the installation of the drain line and connection to a power source. Dishwashers are bolted
to the adjacent cabinetry and/or underside of the countertop.

•

Free-standing Refrigerators. The Taxpayer’s free-standing refrigerators are installed by drilling
a hole through the cabinet wall to establish a connection between the appliance and the
waterline. The installation is completed by connecting the appliance to a power source.

•

Built-in Refrigerators. The installation of the Taxpayer’s built-in refrigerators requires an
electrician to physically connect the electrical cable that comes furnished with the product

1

directly into the wiring of the residential structure, as opposed to plugging the appliance into
a power outlet. The built-in refrigerators have an inset door such that the appliance sits flush
with the surface of the cabinetry. After installation, the built-in refrigerators have no visible
compressor vents and may also have cabinet paneling to camouflage the appliance.
•

Built-in Microwaves. The Taxpayer’s built-in microwaves generally do not include finished
exterior sides. They may be installed by cutting a hole into an existing cabinet and securing
the microwave inside the opening with bolts, or they may be installed into cabinetry that is
custom designed to accommodate the size of the particular microwave. Some of the
microwaves can be plugged into a power source and some are hardwired to a dedicated
circuit. The microwaves either recycle the air or the air from the appliance is removed through
a series of vents or ducts that carry the air outside. After installation, the appliances will appear
flush with the cabinetry.

•

Free-standing Range/Ovens. The installation of the Taxpayer’s free-standing range/ovens
combination appliances involves connection of the appliance to a gas line or power source.
This sometimes requires the services of an electrician or heating, ventilation, and air
conditioning (“HVAC”) technician to adjust the orifices on the appliance burners to correct the
gas flow if the appliance uses propane gas.

•

Built-in Range/Ovens. The Taxpayer’s built-in range/oven combination appliances come in
both hardwired and non-hardwired varieties, but installation generally requires the services
of an electrician to connect the appliance to the power source. The appliance appears flush
with the surface of the countertop after installation.

•

Free-standing Icemaker. The installation of the Taxpayer’s free-standing icemakers typically
involves the drilling of a hole in the cabinet wall separating the appliance and the space
underneath the sink, and the subsequent connection of the appliance to a water line and
power source.

•

Built-in Icemaker. The Taxpayer’s built-in icemakers require the connection of an electrical
cable to a dedicated circuit in the household wiring. They are also connected to a water line.
When installation is complete, the appliance appears flush with the countertop surface and
may be camouflaged with cabinet paneling.

•

Electric or Gas Cooktop. The Taxpayer’s electric and gas cooktops are installed directly into the
kitchen countertop. The installation process involves the clamping of the cooktop into a
customized opening in the countertop, the connection of the appliance to a gas or electrical
power supply line by an electrician or HVAC technician, and, in the case of appliances powered
by propane gas, the adjustment of orifices on the burners to correct the gas flow.

Although the removal process for the Taxpayer’s Appliances varies based on whether the appliance is
hardwired, built-in, or free-standing, the Taxpayer’s intent upon installation of all the appliances for
both types of End Users is that the appliances remain in place for the duration of their useful life.

2

Is the installation of the Taxpayer’s Appliances subject to the Tennessee sales tax?
Ruling: If a particular appliance remains tangible personal property upon installation, the
installation of the appliance will be subject to the Tennessee sales tax. If a particular appliance
becomes affixed to realty upon installation, the installation of the appliance is not subject to
the Tennessee sales tax.
In the Taxpayer’s case, the following appliances remain tangible personal property upon
installation: washers, dryers, free-standing refrigerators, free-standing range/ovens, and freestanding icemakers. The installation of these appliances is subject to the Tennessee sales tax.
Conversely, the following appliances become affixed to realty upon installation: dishwashers,
built-in refrigerators, built-in microwaves, built-in range/ovens, built-in icemakers, and electric
and gas cooktops. The installation of these appliances is not subject to Tennessee sales tax.

Under the Retailers’ Sales Tax Act,1 the retail sale in Tennessee of tangible personal property and
specifically enumerated services is subject to the sales tax, unless an exemption applies. 2 One
specifically enumerated service taxable at retail is the installation of “tangible personal property that
remains tangible personal property after installation … where a charge is made for the installation,
whether or not the installation is made as an incident to the sale of tangible personal property …, and
whether or not any tangible personal property … is transferred in conjunction with the installation
service.”3
TENN. COMP. R. & REGS. 1320-05-01-.27 (2016) (“Rule 27”) provides further clarification regarding the
taxability of such charges. According to Rule 27(1), “Charges for installing tangible personal property
that remains tangible personal property after installation are subject to sales and use tax. The tax is
due from the dealer regardless of whether the dealer or someone acting on the dealer’s behalf installs
the property.”4
However, TENN. CODE ANN. § 67-6-209(b) (Supp. 2019) provides that “[w]here a contractor or
subcontractor … uses tangible personal property in the performance of the contract, or to fulfill
contract or subcontract obligations, whether the title to such property be in the contractor,
subcontractor, contractee, subcontractee, or any other person,” the contractor must pay use tax on
Tennessee Retailers’ Sales Tax Act, ch. 3, §§ 1-18, 1947 Tenn. Pub. Acts 22, 22-54 (codified as amended at TENN. CODE ANN.
§§ 67-6-101 to -907 (2018 & Supp. 2019)).
1

“Retail sale” is defined as “any sale, lease, or rental for any purpose other than for resale, sublease, or subrent.” TENN. CODE
ANN. § 67-6-102(76) (2018). TENN. CODE ANN. § 67-6-102(78)(A) defines “sale” in pertinent part to mean “any transfer of title or
possession, or both, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatsoever of
tangible personal property for a consideration.”
2

TENN. CODE ANN. § 67-6-205(c)(6) (2018). “Tangible personal property” includes “property that can be seen, weighed, measured,
felt, or touched, or that is in any other manner perceptible to the senses.” TENN. CODE ANN. § 67-6-102(89)(A).
3

4

TENN. COMP. R. & REGS. 1320-05-01-.27(1) (2016).

3

the purchase price5 of such tangible personal property unless the property was “previously subjected
to a sales or use tax, and the tax due thereon has been paid.” Similarly, Rule 27(4) provides that
“Charges made for installing tangible personal property which becomes a part of real property, are
not subject to sales and use tax. The person so installing the property shall be liable for any sales and
use tax that may be due, if any, on the property bought and/or used in making the installation.” 6 In
summary, Tennessee law requires a contractor making improvements to real property to pay sales or
use tax on any tangible personal property used or installed under the contract, unless tax has already
been paid.
Here, The Taxpayer charges the End Users Tennessee sales tax on all appliance sales. Therefore,
under the facts provided, the contractor will not owe use tax on appliances it installs that become a
part of real property because the appliances were “previously subjected to a sales or use tax, and the
tax due thereon has been paid.”7 The contactor will, however, be liable for any sales and use tax that
may be due on the property bought and/or used in making the installation.8
If the appliance becomes affixed to realty upon installation, the installation of the appliance will not
be subject to the Tennessee sales tax. However, the Taxpayer should charge sales tax on the
installation of the household appliances at issue if the appliance remains tangible personal property
following installation. In order to determine whether tax is due on the installation charges, the
Department relies upon guidance from the courts. 9
The issue of whether an item of tangible personal property becomes part of realty depends upon the
application of the law of fixtures to the factual circumstances. The Tennessee Supreme Court has held
that the question of when an item is considered a fixture must be resolved by ascertaining the intent
of the parties.10 The court has explained that “only those chattels are fixtures which are so attached
to the freehold that, from the intention of the parties and the uses to which they are put, they are
presumed to be permanently annexed, or a removal thereof would cause serious injury to the
freehold.”11

TENN. CODE ANN. § 67-6-102(75) states that the purchase price “applies to the measure subject to use tax and has the same
meaning as sales price.” TENN. CODE ANN. § 67-6-102(82) defines the term “sales price” in pertinent part as “the total amount of
consideration, including cash, credit, property, and services, for which personal property or services are sold, leased, or rented,
valued in money, whether received in money or otherwise,” without any deduction for items such as the seller’s cost of the
property sold.
5

6

TENN. COMP. R. & REGS. 1320-05-01-.27(1) (2016).

7

TENN. CODE ANN. § 67-6-209(b) (Supp. 2019).

8

Id.

9

[REDACTED].

10

Gen. Carpet Contractors, Inc. v. Tidwell, 511 S.W.2d 241, 242-243 (Tenn. 1974).

11

Magnavox Consumer Elects. v. King, 707 S.W.2d 504, 507 (Tenn. 1986) (quoting Hickman v. Booth, 173 S.W.438 (Tenn. 1914)).

4

Therefore, if the property is intended to be removable at the pleasure of the owner, it is not a fixture. 12
Both objective and subjective factors may show such intent.13 Objective factors include the type of
structure, the mode of attachment, and the use and purpose of the property. 14 The subjective factor
is the expressed intent, if any, of the parties.15
Courts have also found that tangible personal property becomes a part of realty if removing the
personalty would seriously damage the building to which it is affixed. 16 Further, courts have held that
tangible personal property is more akin to a fixture if removal would destroy its essential character as
personalty.17
For example, the Tennessee Supreme Court in Harry J. Whelchel Co. looked at both the stated intent of
the farmers, as well as the objective factors noted above, and reached the conclusion that the grain
bins at issue were personalty.18 Although the bins were large in size and bolted to a concrete base,
the court found that they were attached to the concrete base solely for the purpose of preventing
them from blowing over in a high wind when empty.19 Additionally, the bins were financed as personal
property, sold at foreclosure as personal property, and installed by lessees on leased farms. 20
Likewise, the Tennessee Court of Appeals in Keenan found that a large ornamental gate remained
personalty despite having a substantial concrete foundation poured for its support that would leave
craters were it removed.21 The court lent greater significance to the person’s stated intention that the
gate would be moveable and that it was designed so as to be moveable if necessary.22
On somewhat different facts, the Tennessee Court of Appeals in Hubbard reached a similar conclusion
in holding that two one-story branch bank buildings were personal property.23 It based its ruling on
the facts that the leased buildings were constructed to be portable, such that they could be moved or
sold as market conditions or need for the buildings changed, and that the leases expressly provided
that the buildings were not to become fixtures. 24
12

Id.

13

Hubbard v. Hardeman Cnty. Bank, 868 S.W.2d 656, 660 (Tenn. Ct. App. 1993).

14

Harry J. Whelchel Co. v. King, 610 S.W.2d 710, 713-714 (Tenn. 1980).

15

Id.

See Process Sys., Inc. v. Huddleston, No. 101801-I, 1996 WL 614526, at *3 (Tenn. Ct. App. Oct. 25, 1996) (citing Memphis Hous.
Auth. v. Memphis Steam Laundry-Cleaner, Inc., 463 S.W.2d 677, 679 (Tenn. 1971)).
16

See id. (finding that conveyor system’s essential character would be destroyed upon removal, which required cutting system
components into pieces with an acetylene torch) (citing Green v. Harper, 700 S.W.2d 565, 567 (Tenn. Ct. App. 1985)).
17

18

610 S.W.2d at 714.

19

Id.

20

Id.

21

Keenan v. Fodor, No. M2011-01475-COA-R3CV, 2012 WL 3090303, at *8-9 (Tenn. Ct. App. July 30, 2012).

22

Id.

23

868 S.W.2d at 660.

24

Id.

5

In contrast, the Tennessee Supreme Court in General Carpet Contractors examined carpet that was laid
using the tackless strip method and was therefore easily removable.25 The court found that the carpet
became realty because the parties installed it with the intent that it remain in place for the length of
its useful life. The method of installation simply allowed for easy replacement of the carpet when it
was worn out.26 Similarly, the Tennessee Court of Appeals found in Process Systems, Inc. that removal
of a conveyor system would damage the building in which it was installed and would destroy the
system’s essential character.27 Accordingly, the conveyer system was held to be an improvement to
real property.28
Additionally, the Tennessee Court of Appeals found in Hermann Holtkamp Greenhouses, Inc. that a
person’s greenhouses became realty upon installation based on their enormous square footage, builtin restrooms and lunchrooms, and concrete tunnels.29 The court expressed that each of these facts
reflected an intention that the greenhouses remain permanently installed on the property. 30
APPLIANCES THAT REMAIN TANGIBLE PERSONAL PROPERTY
As noted above, in determining whether an appliance becomes a part of the realty or remains tangible
personal property upon installation, it is important to consider both the expressed intent of the
parties31 (a subjective factor) as well as objective factors such as the mode of attachment,32 whether
removal would cause injury to the real property on which the appliance is installed, 33 and whether
removal of the appliance would destroy its essential character as personal property. 34 Application of
these factors to each of the Taxpayer’s appliances listed below leads to the conclusion that all of these
appliances remain tangible personal property after installation.

25

511 S.W.2d at 243.

26

Id.

27

1996 WL 614526 at *3.

28

Id.

Hermann Holtkamp Greenhouses, Inc. v. Metro. Nashville & Davidson Cnty., No. M2009-00345-COA-R3-CV, 2010 WL 366697, at
*9 (Tenn. Ct. App. Feb. 2, 2010).
29

30

Id.

31

Hubbard v. Hardeman Cnty. Bank, 868 S.W.2d 656, 660 (Tenn. Ct. App. 1993).

Tennessee Supreme Court has stated that the mode of attachment is an objective factor that may show the intent of the
parties. General Carpet Contractors, 511 S.W.2d at 242-243; Harry J. Whelchel Company, 610 S.W.2d at 713-714.
32

The courts have generally held that tangible personal property becomes a part of the realty if removing the personal property
would seriously damage the real property to which it is affixed. Magnavox Consumer Elects., 707 S.W.2d at 507; Process Systems,
Inc., 1996 WL 614526, at *3; Memphis Housing Authority, 463 S.W.2d at 679.
33

The Tennessee Court of Appeals has stated that tangible personal property becomes a part of the realty if removal would
destroy its “essential character as personalty.” See Process Sys., Inc., 1996 WL 614526, at *3; Green, 700 S.W.2d at 567.
34

6

1. Washing Machines and Dryers
The mode of attachment for washing machines and dryers demonstrates that these appliances
remain tangible personal property following installation. The washing machines only require a
connection to the water line and a power source, and the dryers only require a connection to a power
source. Based on these facts, it appears that the mode of attachment primarily involves relatively
superficial connections to power and utility supplies. The non-invasive nature of the installation
indicates that these appliances are meant to be removable at will. Such intent indicates that the
washing machines and dryers remain tangible personal property following installation.
Second, the removal of the washing machines and dryers is unlikely to cause injury to the real property
on which they are installed. Additionally, installation of the appliances is relatively simple and occurs
after the real property itself is constructed. The mode of attachment and the fact that installation
occurs after the real property is constructed indicate that no serious damage to the underlying real
property would occur and that the residence would remain structurally intact following the removal
of the appliances.
Third, the removal of washers and dryers would not destroy their essential character as personal
property. A washing machine or dryer may be removed from the location in which it is installed and
moved to a new location without physical damage or alteration of the value of the appliance. This
demonstrates that the appliances retain their essential character as tangible personal property upon
removal and relocation.
All of these factors support the conclusion that the washing machines and dryers remain tangible
personal property following installation. As a result, the installation of washers and dryers is subject
to the Tennessee sales tax.
2. Free-standing Refrigerators
The mode of attachment of a free-standing refrigerator demonstrates that the appliance remains
tangible personal property. The free-standing refrigerators only require a connection to the water line
and a power source. The non-invasive nature of the installation indicates that these appliances are
meant to be removable at will. Such intent indicates that the free-standing refrigerators remain
tangible personal property following installation.
Second, the removal of a free-standing refrigerator is unlikely to cause injury to the real property on
which it is installed. Additionally, installation of the free-standing refrigerators is relatively simple and
occurs after the real property itself is constructed. The mode of attachment and the fact that
installation occurs after the real property is constructed indicate that no serious damage to the
underlying real property would occur and that the residence would remain structurally intact
following the removal of the appliance.
Third, the removal of a free-standing refrigerator would not destroy its essential character as personal
property. A free-standing refrigerator may be removed from the location in which it is installed and
moved to a new location without physical damage or alteration of the value of the appliance. This
demonstrates that the appliance retains its essential character as personalty upon removal and
relocation.

7

All of these factors support the conclusion that the free-standing refrigerators remain tangible
personal property following installation. As a result, the installation of the free-standing refrigerators
is subject to the Tennessee sales tax.
3. Free-standing Range/Ovens
The mode of attachment of a free-standing range/over demonstrates that the appliance remains
tangible personal property. The free-standing range/ovens only require a connection to a gas line or
power source. The non-invasive nature of the installation indicates that these appliances are meant
to be removable at will. Such intent indicates that the free-standing range/ovens remain tangible
personal property following installation.
Second, the removal of a free-standing range/oven is unlikely to cause injury to the real property on
which it is installed. Additionally, the installation of the free-standing range/oven combination
appliances is relatively simple and occurs after the real property itself is constructed. The mode of
attachment and the fact that installation occurs after the real property is constructed indicate that no
serious damage to the underlying real property would occur and that the residence would remain
structurally intact following the removal of the appliance.
Third, the removal of a free-standing range/over would not destroy its essential character as personal
property. A free-standing range/oven may be removed from the location in which it is installed and
moved to a new location without physical damage or alteration of the value of the appliance. This
demonstrates that the appliance retains its essential character as personalty upon removal and
relocation.
All of these factors support the conclusion that that the free-standing range/ovens remain tangible
personal property following installation. As a result, the installation of the free-standing range/ovens
is subject to the Tennessee sales tax.
4. Free-standing Icemakers
The mode of attachment of a free-standing icemaker demonstrates that the appliance remains
tangible personal property. The free-standing icemakers require a connection to the water line and a
power source. The non-invasive nature of the installation indicates these appliances are meant to be
removable at will. Such intent indicates that the free-standing icemakers remain tangible personal
property following installation.
Second, the removal of a free-standing icemaker is unlikely to cause injury to the real property on
which it is installed. Additionally, installation of the free-standing icemakers is relatively simple and
occurs after the real property itself is constructed. The mode of attachment and the fact that
installation occurs after the real property is constructed indicate that no serious damage to the
underlying real property would occur and that the residence would remain structurally intact
following the removal of the appliance.
Third, the removal of a free-standing icemaker would not destroy its essential character as personal
property. A free-standing icemaker may be removed from the location in which it is installed and
moved to a new location without physical damage or alteration of the value of the appliance. This

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demonstrates that the appliance retains its essential character as personalty upon removal and
relocation.
All of these factors support the conclusion that the free-standing icemakers remain tangible personal
property following installation. As a result, the installation of the free-standing icemakers is subject to
the Tennessee sales tax.
APPLIANCES THAT BECOME AFFIXED TO REALTY
As noted above, in determining whether an appliance becomes a part of the realty or remains tangible
personal property upon installation, it is important to consider both the expressed intent of the
parties35 (a subjective factor) as well as objective factors such as the mode of attachment, 36 whether
removal would cause injury to the real property on which the appliance is installed, 37 and whether
removal of the appliance would destroy its essential character as personal property.38 Application of
these factors to each of the Taxpayer’s appliances listed below leads to the conclusion that all of these
appliances become affixed to realty upon installation.
1. Dishwashers
First, the mode of attachment of the dishwashers demonstrates the stated subjective intent of the
parties that the dishwashers become affixed to realty following installation. The dishwashers require
a connection to a water line, drain line, and power source. They are also bolted to the adjacent
cabinetry and/or underside of the countertop. Once installed, dishwashers are unlikely to be removed
and relocated. Such intent indicates that dishwashers become affixed to realty following installation.
Second, although the removal of a dishwasher is unlikely to cause serious injury to the real property
to which it is installed, dishwashers usually remain in place for the duration of their useful life. And
some damage may occur upon removal. This suggests that dishwashers become affixed to realty
following installation.
Although, the removal of a dishwasher may not destroy its essential character as personal property,
the totality of the circumstances indicates that dishwashers become affixed to realty following
installation. As a result, the installation of dishwashers is not subject to the Tennessee sales tax.

35

Hubbard v. Hardeman Cnty. Bank, 868 S.W.2d 656, 660 (Tenn. Ct. App. 1993).

Tennessee Supreme Court has stated that the mode of attachment is an objective factor that may show the intent of the
parties. General Carpet Contractors, 511 S.W.2d at 242-243; Harry J. Whelchel Company, 610 S.W.2d at 713-714.
36

The courts have generally held that tangible personal property becomes a part of the realty if removing the personal property
would seriously damage the real property to which it is affixed. Magnavox Consumer Elects., 707 S.W.2d at 507; Process Systems,
Inc., 1996 WL 614526, at *3; Memphis Housing Authority, 463 S.W.2d at 679.
37

The Tennessee Court of Appeals has stated that tangible personal property becomes a part of the realty if removal would
destroy its “essential character as personalty.” See Process Sys., Inc., 1996 WL 614526, at *3; Green, 700 S.W.2d at 567.
38

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2. Built-in Refrigerators
First, the mode of attachment of a built-in refrigerator demonstrates the stated subjective intent of
the parties that the appliance becomes affixed to realty following installation. The built-in refrigerators
are designed to be placed inside cabinetry that is custom-made to accommodate the size of the
particular model. The installation requires an electrician to hardwire a connection from the appliance
directly into the wiring of the residential structure to provide a power source. Additionally, due to the
invasive nature of the installation, the appliance is unlikely to be removed and relocated. Such intent
indicates that the built-in refrigerators become affixed to realty following installation.
Second, the removal of the built-in refrigerators is likely to cause serious injury to the real property
on which it is installed. This suggests that built-in refrigerators become affixed to realty following
installation. Here, installation of the built-in refrigerators requires placement of the appliance in
customized cabinetry and hardwiring to a dedicated circuit in the household wiring. Thus, the built-in
refrigerators are integrated into the residence and their removal would require significant labor and
would very likely cause damage to the cabinetry in which the appliance is installed. These facts are an
indication that the built-in refrigerators become affixed to realty following installation.
Although, the removal of the built-in refrigerators may not destroy their essential character as
personal property, the totality of the circumstances indicates that the built-in refrigerators become
affixed to realty following installation. As a result, the installation of the built-in refrigerators is not
subject to the Tennessee sales tax.
3. Built-in Microwaves
First, the mode of attachment of a built-in microwave demonstrates the stated subjective intent of the
parties that the appliance becomes affixed to realty following installation. The built-in microwaves are
either placed into existing cabinetry or placed inside cabinetry that is custom-made to accommodate
the particular appliance model. The microwaves are bolted into place. They may be plugged in or
hard-wired. Hard-wired installation requires an electrician to hardwire a connection from the
appliance to a dedicated circuit in the residence wiring to provide a power source. Additionally, the
built-in microwaves either recycle the air or air from the appliance is removed through a series of
vents or ducts that carry the air outside. After installation, these appliances appear flush with the
cabinetry to which they are attached. Consequently, they are unlikely to be removed or relocated. All
of these factors indicate that the built-in microwaves become affixed to realty following installation.
Second, although the removal of a built-in microwave is unlikely to cause serious injury to the real
property to which it is attached, built-in microwaves usually remain in place for the duration of their
useful lives. And, some damage may occur upon removal. This suggests that built-in microwaves
become affixed to realty following installation.
Although, the removal of a built-in microwave may not destroy its essential character as personal
property, the totality of the circumstances indicates that built-in microwaves become affixed to realty
following installation. As a result, the installation of built-in microwaves is not subject to the Tennessee
sales tax.

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4. Built-in Range/Ovens
First, the mode of attachment of built-in range/ovens demonstrates the stated subjective intent of the
parties that these appliances become affixed to realty following installation. Unlike freestanding
ranges, built-in range/ovens are designed to be placed between cabinets for a seamless look and
when installed appear flush with the surface of the surrounding cabinets. Built-in range/ovens come
in both hardwired, plug-in, and gas varieties, and installation generally requires the services of an
electrician to connect the appliance to the power source.
Second, although the removal of a built-in range/oven is unlikely to cause serious injury to the real
property to which it is installed, built-in range/ovens usually remain in place for the duration of their
useful life. And some damage may occur upon removal. This suggests that built-in range/ovens
become affixed to realty following installation.
Although, the removal of the built-in range/ovens may not destroy their essential character as
personal property, the totality of the circumstances indicates that the built-in range/ovens become
affixed to realty following installation. As a result, the installation of the built-in refrigerators is not
subject to the Tennessee sales tax.
5. Built-in Icemakers
First, the mode of attachment of built-in icemakers demonstrates the stated subjective intent of the
parties that these appliances become affixed to realty following installation. Built-in icemakers are
generally installed so they are flush with the surface and/or camouflaged with cabinet paneling. They
are hard-wired into the household wiring and connected to the water line.
Second, although the removal of a built-in icemaker is unlikely to cause serious injury to the real
property to which it is installed, icemakers usually remain in place for the duration of their useful life.
And some damage may occur upon removal. This suggests that built-in icemakers become affixed to
realty following installation.
Although, the removal of the built-in icemakers may not destroy their essential character as personal
property, the totality of the circumstances indicates that the built-in icemakers become affixed to
realty following installation. As a result, the installation of the built-in icemakers is not subject to the
Tennessee sales tax.
6. Electric or Gas Cooktops
First, the mode of attachment of the electric and gas cooktops indicates that they become affixed to
realty following installation. The electric and gas cooktops are installed directly into an opening in the
countertop designed specifically for the appliance model and are then connected to a gas or electrical
power supply line by an electrician or HVAC technician. Additionally, because the appliances are
clamped into a customized opening in the countertop, they are unlikely to be removed and relocated.
Such intent indicates that the electric and gas cooktops become affixed to realty following installation.
Second, the removal of the electric and gas cooktops is likely to cause serious injury to the real
property in which they are installed. Here, installation of the electric and gas cooktops requires
insertion of the appliance directly into the countertop surface. This suggests that the electric and gas
cooktops are integrated into the structure of the residence and that their removal would require
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significant invasive labor, including possible damage to the countertop surface in which the appliance
is installed. These facts are an indication that the electric and gas cooktops become affixed to realty
following installation.
Although, the removal of the electric and gas cooktops may not destroy their essential character as
personal property, the totality of the circumstances indicates that the electric and gas cooktops
become affixed to realty following installation. As a result, the installation of the electric and gas
cooktops is not subject to the Tennessee sales tax.

APPROVED:

David Gerregano
Commissioner of Revenue

DATE:

11/2/2020

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