The sale and installation as well as the repair of restaurant equipment that remains tangible personal property after installation is subject to sales and use tax. Restaurant equipment that is intended to be removable and capable of being relocated and used elsewhere if a restaurant changes locations remains tangible personal property after installation. Removal of restaurant equipment generally does not destroy the equipment or damage the realty. Common examples include free standing ovens, free standing refrigerators and freezers, deep fryers, microwaves, coffee machines, soda machines, warming equipment, mixers, bar coolers, ice cream freezers, etc.
The sale and installation as well as the repair of restaurant equipment that becomes part of realty upon installation are not subject to sales and use tax. In this case, the party installing or repairing the restaurant equipment must pay sales tax on its purchase of the property being installed or the repair parts). Common examples include built-in pizza ovens, walk-in freezers and coolers that are part of the building structure, exhaust fans, vent-a-hoods attached to the realty, etc.
Click here for a non-exclusive list of common restaurant equipment and property and the proper classification that could generally be applied to them. This article provides additional guidance. For more information regarding how to make the determination whether property remains tangible or becomes realty after installation, see the following rulings: