Installation Labor

A separately stated installation charge, made known to the customer at the time of sale, is not subject to tax. A charge to place a complete, separable and functioning unit at the job site is an installation charge. However, a charge for assembling raw materials, components, sub-assemblies or parts into a functioning industrial unit or the creation of support systems, such as piping and electrical systems, is subject to tax. The tax applies to fabrication labor purchased from out-of-state sources if the property is delivered or brought into Maryland. The value of your own labor applied to your own property, however, is not taxable.

If you fabricate property that is delivered outside the state, you are not required to collect the tax on that item. However, you many have an obligation to collect tax in that state if you engage in business in that state.