Sales of Appliances, Including "Built-In" Appliances

In order to determine the tax treatment of the sale of an appliance, the seller must first determine whether it is making a real property improvement or selling tangible personal property. Sales of real property improvements are not taxable, while sales of tangible personal property are taxable, unless an exemption applies.

Sales of Built-In Appliances
A "built-in" appliance is an appliance that is affixed to the real estate with the intention that it remain permanently with the building or home. An appliance that is direct-wired or connected to a natural gas line is not considered to be "built-in" solely because of this connection. Similarly, a refrigerator with an ice maker or water dispenser is not considered to be "built-in" solely because of its connection to the realty by a water line.

The tax treatment of the sale of a built-in appliance is dependent upon a number of factors:

  1. Is it a built-in appliance that is permanently affixed in a residential facility?
    • Yes – Real property improvement
    • No – Tangible personal property
  2. Is it built-in in a nonresidential facility?
    • Yes – Is the appliance used for a process or business function (for example, refrigerator in a restaurant)?
      • Yes – Tangible personal property
      • No – Real property improvement
    • No – Tangible personal property

The tax treatment of a real property improvement (RP) and tangible personal property (TPP) is provided in the chart at the end of this article, with examples of some common appliances.

Sales of Appliances Not "Built-In"
The sale of an appliance that is not "built-in," including charges for shipping or delivery, is subject to Wisconsin sales tax, since it is the sale of tangible personal property. The seller may purchase, without tax for resale, the appliance and all parts and materials that are physically transferred to the customer.

Repair or Other Service to Appliances
The repair of or other service to appliances is subject to Wisconsin sales or use tax. The law deems certain items, such as refrigerators, freezers, stoves, ovens, range hoods, dishwashers, to retain their character as tangible personal property for purposes of repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, and maintenance. The service provider may purchase without tax, for resale, the repair parts that it physically transfers to its customer in the performance of such services.

Note: The tax treatment for repair and other service applies to appliances in both residential and non-residential buildings, regardless of whether the appliance was tangible personal property or a real property improvement when installed.

Chart to Determine Whether Appliances are
Real Property (RP) or Tangible Personal Property (TPP)

The following chart provides the tax treatment of a retailer's sale of an appliance that is delivered and installed/set-up by the retailer.

RP – Sale is not taxable; seller/installer pays tax on its purchase of appliance and other materials

TPP – Sale is taxable, unless exemption applies; seller/installer may purchase without tax for resale the appliance and other property that is physically transferred to customer

Item Residential Nonresidential -
Serves a Business
or Process Function
Nonresidential -
Serves a Building
Function
(e.g., a dishwasher in an
employee breakroom
Dishwasher
(Built-in)
RP TPP RP
Dishwasher
(Portable or Freestanding)
TPP TPP TPP
Range
(Freestanding)
TPP TPP TPP
Oven (Built-in) RP TPP RP
Slide-in Range TPP TPP TPP
Stovetop
(Built into countertop)
RP TPP RP
Range Hood RP TPP RP
Warming Drawer RP TPP RP
Microwave Drawer RP TPP RP
Over-the-range microwave RP TPP RP
Microwave
(Freestanding)
TPP TPP TPP
Microwave
(Built into cabinet)
RP TPP RP
Refrigerator
(Built-in)
RP TPP RP
Refrigerator
(Freestanding)
TPP TPP TPP
Wine cooler
(Built into cabinet)
RP TPP RP
Ice maker
(Built into cabinet)
RP TPP RP

Last updated July 9, 2013