Tennessee Sales Tax on Pool? Capital Improvement?

Question

Hey All!

I'm posting this in the STR forum since so many of you have properties in TN, so maybe someone is or knows an expert in this matter. If it belongs elsewhere let me know!

I'm building a cabin in the smokies with a container pool. The pool manufacturer/ vendor is from Indiana, and they are shipping it to TN. My contractor will install the water/gas hookups and build a deck around it. The intention is to be a permanent part of the property, although it is theoretically possible to be detached later on and moved.

The vendor wants to charge me TN sales tax. I'm pretty sure I shouldn't have to pay this, as this is a straight up capital improvement. I did a little research and found something about above ground pools being a capital improvement, but I'm not 100% sure how it applies to my case. Is there a form I can sign to exempt me from taxes? Is there relevant text in TN tax code I could show the vendor?

@Greg O'Brien

@Basit Siddiqi @Michael Baum

You guys are always helpful with tax questions, so I figured I'd tag you!

Thanks in advance!

Michael Baum · Answer

What @Wayne Brooks said @Eric F.. If you are paying the contractor for the pool, materials and install, then sales tax is not applicable.

Seeing as you are paying for the install, but buying the pool and associated stuff from the manufacturer, you will have to pay sales tax on that purchase.

It's just like if I bought a head gasket kit for my car but paid a mechanic to install it. I pay tax on the kit.

Have you called the state to get a clarification? They should be able to let you know.

Eric F. · Answer

Thanks all for your replies!

I didn't follow up yet with the state, but I'm guessing you're all right that I will only be exempted if I have them install the pool. Which is kind of strange, because I can have them install for less money than the sales tax, but the problem is they are out of state.

My pool gets delivered in two weeks so I will follow up with photos if there is interest, but here are a couple in the smokies that I know of:

https://www.airbnb.com/rooms/5...

https://www.airbnb.com/rooms/5...

Jay Thomas · Answer

A container like this could have great longevity if made from the right materials. It would be really interesting to see some conceptual photos or drawings of what it could look like — that might help bring the idea to life and make it easier to imagine building a real-life version. It definitely seems like a cool concept that's worth exploring further! 🤩

Curtis Mears · Answer

@Eric F.

Everything gets taxed. I am guessing you heard that the pool could be written off vs depreciated. My guess is it will get depreciated so you would not get the immediate write off, but maybe that is what you heard.

Brooklyn McCarty · Answer

I would ask your cpa for sure.

Eric F. · Answer

There are already one or two that I know of in the Gatlinburg/PF area, but none as cool as mine ;^) I don't know exact terms of longevity but when I researched, I felt confident enough to go ahead. Containers themselves are built to last, and the Pool company doing the finishings and coats is very reputable. Everyone on here is saying to be unique and stand out, and I thought this was a great way to do that! Imagine a window in a pool overlooking endless views for miles...

Leslie Anne Morris · Answer

Seems like a cool idea. Interested in conceptual photos / drawings. Longevity of a container like that.

Eric F. · Answer

01-21 - Pool and Spa Installation (October 2001) (tn.gov)

Does this work?

Eric F. · Answer

@Wayne Brooks

I get what you're saying with the bathtub, but I thought I saw something that said a pool is not taxable. Let me look.

Tennessee Sales Tax on Pool? Capital Improvement?

Tennessee Sales Tax on Pool? Capital Improvement?

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