ÿWPCO /UN¢ %ð 0(öFw@d4¤¸Ç 0JÏ 0T 0^m 0hË 0r3 0|¥ 0†! 0§ 1u7 0d¬U>U*NB)x AQ¡Æò 0D¸ 0@ü 0D< DC€ D/à Bò B D3, AM_ U*¬ (Ö v~þ vÓ|(ÈhH  Z ‹6Times New Roman RegularX($¡¡c:\office\wpwin\template\order.wpt  D   D  D  U! 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ÔÔ€ÔÝ  ÝÒ € ÒÒ À ÒÑ ` ÑÑ\R AØ'\ÑÑ7€¶JXdìXXdð7ÑÑ  ÑØ ØÓ&€X°d&Ó›Þ ÞÌà@ àIN€THE€SUPREME€COURT€OF€TENNESSEEÌà@ àAT€NASHVILLEÌÌÌÌÌCOLEMILL€ENTERPRISES,€INC.,à àà à)à àòòò òFOR€PUBLICATIONó óóóÌà àà àà àà àà àà à)à àFiled:à àMarch€30,€1998Ìà àPlaintiff/Appellant,à àà àà à)Ìà àà àà àà àà àà à)à àDAVIDSON€œCHANCERYÌv.›à àà àà àà àà àà àœ)€€€€€€€€€€€#€94„3217„I›Ìà àà àà àà àà àà àœ)Ì€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€)›à àHon.€Irvin€H.€Kilcrease,€Jr.,ÌJOE€HUDDLESTON,€Commissionerà à)à àJudge.Ìof€Tennessee€Department€of€Revenue,à à)Ìà àà àà àà àà àà à)à àNO.€€01S01„9706„CH„00143Ìà àDefendant/Appellee.à àà àà à)ÌÌÌÌÌÌòòFor€the€Plaintiffóó:à àà àà àà àà àòòFor€the€Defendantóó:ÌÌRichard€L.€Colbertà àà àà àà àà àJohn€Knox€WalkupÌCornelius€&€Collinsà àà àà àà àà àAttorney€General€and€ReporterÌÙ€!ÙœßR€*,%A1-j|þòß` ç `€€@ÿRß›Nashville,€Tennessee€à àà àà àà àà àÌà àà àà àà àà àà àà àMichael€E.€MooreÌà àà àà àà àà àà àà àSolicitor€GeneralÌà àà àà àà àà àà àà àÌà àà àà àà àà àà àà àCharles€L.€LewisÌà àà àà àà àà àà àà àDeputy€Attorney€GeneralÌà àà àà àà àà àà àà àÌà àà àà àà àà àà àà àGary€N.€Meade,€Jr.Ìà àà àà àà àà àà àà àAssistant€Attorney€GeneralÌà àà àà àà àà àà àà àNashville,€Tennessee€ÌÌÌÌÌÌÌà@ àòòò òÔ€èÔO€P€I€N€I€O€NÌÌÌÌÌÔ€XÔó óóóReversed€and€Remanded.à àà àà àà àà àDrowota,€J.ÇÓÓà àWe€granted€the€applications€of€both€Colemill€Enterprises,€Inc.€and€the€Department€ofÏRevenue€in€this€action€in€which€Colemill€Enterprises,€Inc.,€pursuant€to€Tenn.€Code€Ann.€ððÏ67„1„1801,€challenges€an€assessment€against€it€of€state€and€local€sales€taxes.€€TheÏassessment€was€based€on€transactions€whereby€Colemill€Enterprises,€Inc.€substantiallyÏmodified€airplanes€for€out„of„state€customers.ÌÌà àFor€multiple€reasons€hereinafter€described,€we€conclude€that€neither€of€the€identifiedÏtransactions€on€which€the€assessment€was€based€is€subject€to€sales€taxes€on€(i)€sales€ofÏtangible€personal€property€pursuant€to€Tenn.€Code€Ann.€ðð€67„6„202€or€(ii)€the€installing€ofÏtangible€personal€property€under€Tenn.€Code€Ann.€ðððð€67„6„102(23)(F)(vi)€and€67„6„205.€ÏBased€on€this€determination,€we€find€it€unnecessary€to€address€the€other€issues€presented€inÏthe€respective€applications.€€The€judgment€of€the€Court€of€Appeals€and€that€of€the€trial€courtÏare€reversed,€and€the€plaintiffððs€suit€challenging€the€assessment€of€sales€taxes€is€upheld.€€TheÏplaintiff€is€entitled€to€summary€judgment,€and€to€reasonable€attorneyððs€fees€and€expenses€ofÏlitigation€pursuant€to€Tenn.€Code€Ann.€ðð€67„1„1803(d).ÌÌà@ àòòò òBACKGROUNDó óóóÌÌà àColemill€Enterprises,€Inc.,€which€conducts€its€business€at€Cornelia€Fort€Airpark€inÏNashville,€has€challenged€an€assessment€of€sales€taxes€that€the€Department€of€Revenue€madeÏfor€the€audit€period€January€1991€through€March€1994.€€The€assessment,€which€was€madeÏon€July€25,€1994,€was€for€$17,122€in€sales€taxes,€which€amount€included€local€option€taxes.€ÏThe€assessment€additionally€included€interest€that€had€accrued€through€the€date€of€theÍassessment.ÌÌà àErnest€W.€Colbert,€who€is€the€President€of€Colemill€Enterprises,€Inc.,€submitted€anÏaffidavit€accompanying€the€plaintiffððs€motion€for€summary€judgment.€€The€statementsÏcontained€in€that€affidavit€are€uncontroverted€for€the€most€part,€except€inasmuch€as€theyÏinclude€the€characterization€of€Colemill€Enterprises,€Inc.ððs€activities€as€ð ðmanufacturing.ðð€ÏThe€Department€of€Revenue€contends€that€the€taxpayerððs€activities€in€question€did€notÏconstitute€ð ðmanufacturing.ðð€€As€explained€later€in€this€opinion,€a€determination€whether€theÏtaxpayer€was€engaged€in€manufacturing€is€not€necessary€for€our€disposition€of€this€case.€ÏThe€facts€as€set€forth€in€Mr.€Colbertððs€affidavit€included€the€following:ÌÌÓÓà8 àà8 àð ð2.€€The€July€25,€1994,€sales€tax€assessment€in€the€amount€ofÏ$20,€714,€challenged€in€this€action,€is€an€assessment€for€taxesÏon€work€which€Colemill€is€engaged€which€is€commonlyÏreferred€to€as€the€aircraft€ððconversionðð€business.€A€portion€ofÏthe€assessment€includes€sales€tax€amounts€for€ððconversionsððÏproduced€or€manufactured€by€Colemill€for€export€out€of€theÏstate€of€Tennessee.€€The€assessment€also€includes€amounts€forÏa€ððconversionðð€sold€to€an€out„of„state€customer€exempt€fromÏsales€tax€in€its€home€state,€as€well€as€amounts€allegedly€owedÏon€a€ððconversionðð€sale€to€an€out„of„state€customer€acquiring€itÏunder€a€blanket€certificate€of€resale.€€Finally,€the€assessmentÏincludes€local€option€sales€tax€under€Tenn.€Code€Ann.€ðð€ðð€67„6„701€et.€seq.€on€articles€of€tangible€personal€propertyÏproduced€or€manufactured€by€Colemill€in€this€state€for€export€Ïand€on€separate€components€of€ððconversionsðð€manufacturedÏand€sold€by€Colemill.€€It€is€in€these€respects€that€theÏassessment€has€been€challenged€by€Colemill€in€this€action.ÌÌà8 àà8 à3.€€Aircraft€are€manufactured€under€ððtype€certificatesðð€issuedÏby€the€Federal€Aviation€Administration€under€14€C.F.R.ÏSection€2141.€€The€Federal€Aviation€Administration€alsoÏissues€ððsupplemental€type€certificatesðð€under€14€C.F.R.ÏSections€21.111€òòetóó.€òòseqóó.,€under€which€the€holder€of€theÍððsupplemental€type€certificatesðð€is€authorized€to€alter€theÏaircraft€covered€by€the€certificates€by€introducing€a€majorÏchange€in€the€type€of€design.€A€ððsupplemental€type€certificateððÏconsists€of€the€approval€by€the€Federal€AviationÏAdministration€of€a€change€in€the€type€design€of€the€aircraftÏtogether€with€the€type€certificate€previously€issued€for€aircraft.€Ï14€C.F.R.€Section€21.117.€€The€holder€of€a€ððsupplementalÏtype€certificateðð€for€aircraft€is€authorized€to€obtain€newÏairworthiness€certificates€for€the€aircraft€produced€orÏmanufactured€under€the€certificate.€ÌÌà8 àà8 à4.€€For€its€aircraft€ððconversions,ðð€Colemill€introduces€majorÏchanges€in€the€aircraft€that€include€changes€in€engine,Ïpropellers,€wings€and€other€fundamental€parts€of€the€aircraft.€ÏThese€major€changes€alter€the€essential€characteristics€of€theÏaircraft,€so€that€the€aircraft€after€ððconversionðð€leaves€ColemillððsÏfacility€with€a€new€type€designation,€new€performanceÏcharacteristics,€a€new€Pilotððs€Operating€Hankbook€and€a€newÏFederal€Aviation€Administration€Approved€Flight€ManualÏSupplement.€€These€major€changes€are€performed€strictly€inÏaccordance€with€supplemental€type€certificates€issues€toÏColemill€by€the€Federal€Aviation€Administration€for€theÏparticular€aircraft€ððconversionsðð€ððColemill€is€thereby€Ïauthorized€to€manufacture€.€.€.ÌÌà8 àà8 à5.€The€work€performed€by€Colemill€under€the€supplementalÏtype€certificates€issued€to€it€by€the€Federal€AviationÏAdministration€is€not€repair€work.€The€work€does€not€involveÏcorrecting€any€problem,€defect€or€malfunction.€€The€work€isÏnot€necessary€to€preserve€or€restore€the€aircraft€to€its€originalÏcondition.€€In€fact,€the€condition€of€the€aircraft€after€the€workÏis€performed€is€substantially€different€from€the€aircraftððsÏoriginal€condition,€such€that€the€aircraft€leaves€the€facility€withÏa€new€type€designation€and€new€performance€characteristics.€ÏThe€work€is€not€performed€to€correct€disrepair€by€wear,€use,Ïwastage,€injury,€decay,€destruction,€or€dilapidation.€€TheÏpurpose€of€the€work€is€to€change€entirely€and€dramaticallyÏimprove€the€performance€and€safety€characteristics€of€aircraft,Ïnot€to€repair€any€part€of€the€aircraft.€€In€many€instances,€theÏwork€performed€by€Colemill€under€its€supplemental€typeÏcertificate€is€more€expensive€than€the€air€frame€upon€which€theÏwork€is€performed.ÌÌà8 àà8 à.€.€.ÌÌà8 àà8 à7.€€Colemill€does€not€make€separate€charges€to€its€customersÏfor€installation€services€when€a€ððconversionðð€is€manufactured.€ÏInstead,€Colemill€charges€a€single€price€for€the€ððconversion,ððÏwhich€includes€all€of€the€ingredients€that€go€into€theÏmanufacture€of€the€finished€product.€€The€ððconversionððÏColemill€is€authorized€by€law€to€perform€under€theÏsupplemental€type€certificates€issued€by€the€Federal€AviationÏAdministration€is€a€finished€product.€€Colemillððs€supplementalÏtype€certificates€authorize€it€to€perform€all€of€the€work€thatÏcomprises€that€finished€product,€and€do€not€authorize€it€to€mixÏand€match€separate€components€in€whatever€fashion€it€sees€fit.€ÌÌà8 àà8 à8.€€Attached€as€Exhibit€3€hereto€is€a€copy€of€a€ððblanketÏcertificate€of€resaleðð€evidencing€the€purchase€of€a€conversionÏfor€resale€by€Bessemer€Plywood€Corporation,€an€out„of„stateÏpurchaser,€for€which€sales€tax€has€been€included€in€theÏassessment€issued€by€the€Tennessee€Department€of€RevenueÏthat€is€at€issue€in€this€case.€€Also€attached€as€Exhibit€4€is€aÏpurchase€order€for€a€conversion€purchase€issued€to€ColemillÏby€Filtrex,€Inc.,€a€New€Jersey€corporation€exempt€from€salesÏtax€in€the€state€of€New€Jersey.€€Sales€tax€for€this€conversionÏpurchased€by€a€tax„exempt€organization€is€also€included€in€theÏassessment€that€is€at€issue€in€this€case.ððÌÌÌÌÓÓà àThe€ð ðblanket€certificate€of€resaleðð€that€was€attached€to€Mr.€Colbertððs€affidavit€wasÏissued€by€Bessemer€Plywood€Corporation.€€It€indicates,€ð ðthe€merchandise€purchased€(fromÏColemill€Enterprises,€Inc.)€.€.€.€.€is€purchased€for€.€.€.€€a€component€part€of€an€article€to€beÏproduced€for€sale€by€manufacturing,€assembling,€processing,€or€refining.ððÌÌà àThe€purchase€order€from€Filtrex,€Inc.€that€was€attached€to€Mr.€Colbertððs€affidavitÏindicates€that€Filtrex,€Inc.€is€a€tax€exempt€organization.€€This€purchase€order€also€states€thatÏthe€delivery€to€Filtrex,€Inc.€by€Colemill€Enterprises,€Inc.€was€ð ðF.O.B.€Destinationðð€inÏWayne,€New€Jersey.ÌÌà àFrom€the€Department€of€Revenueððs€answer€to€the€taxpayerððs€application€forÏpermission€to€appeal,€it€appears€that€the€only€transactions€at€issue€in€the€challengedÏassessment€were€the€conversion€work€performed€by€the€taxpayer€for€Bessemer€PlywoodÏCorporation,€which€involved€a€purchase€for€resale,€and€the€conversion€work€performed€forÏFiltrex,€Inc.,€which€was€a€sale€to€a€tax€exempt€organization€and€with€respect€to€which€title€toÏtangible€personal€property€was€transferred€by€the€taxpayer€outside€the€State€of€Tennessee.€ÌÌà àBoth€parties€moved€for€summary€judgment.€€The€trial€court€granted€the€summaryÏjudgment€motion€of€the€Department€of€Revenue€and€denied€that€of€the€taxpayer.€€In€additionÏto€ruling€in€favor€of€the€Department€of€Revenue€on€all€substantive€issues€presented,€the€trialÏcourt€ruled€that€the€Department€is€entitled€to€an€award€of€reasonable€attorneyððs€fees€andÏlitigation€expenses€under€Tenn.€Code€Ann.€ðð€67„1„1803(d).€ÌÌà àColemill€Enterprises,€Inc.€appealed€the€trial€courtððs€decision€to€the€Court€of€Appeals.€ÏThe€Court€of€Appeals€agreed€with€the€trial€court€on€all€of€the€substantive€issues€presented,Ïincluding€the€determination€that€the€transactions€at€issue€were€subject€to€sales€taxes€onÏð ðinstallation€servicesðð€under€Tenn.€Code€Ann.€ðð€67„6„102(23)(F)(vi).€€The€Court€ofÏAppeals,€however,€ruled€that,€ð ðthis€is€a€not€a€proper€case€for€the€award€of€(attorneyððs€feesÏand€litigation€expenses).ððÌÌà àAs€indicated,€both€parties€filed€applications€for€permission€to€appeal,€and€this€CourtÏgranted€both€applications.ÌÌà@ àò òòòANALYSISó óóóÌÌà àThe€list€of€the€types€of€transactions€that€are€taxable€under€the€Retailersðð€Sales€TaxÏAct,€Tenn.€Code€Ann.€ðð€ðð€67„6„101,€òòetóó.€òòseqóó.,€is€contained€in€Tenn.€Code€Ann.€ðð€67„6„201.€ÏThat€statute€includes€the€following:ÌÌÓÓà8 àà8 àIt€is€declared€to€be€the€legislative€intent€that€every€person€isÏexercising€a€taxable€privilege€who:ÌÌà8 àà8 àà8 à(1)€Engages€in€the€business€of€selling€tangibleÏpersonal€property€at€retail€in€this€state;ÌÌà8 àà8 àà8 à.€.€.€ÌÌà8 àà8 àà8 à(4)€Rents€or€furnishes€any€of€the€things€orÏservices€taxable€under€this€chapter.ÌÌÌÌÓÓà àThe€section€of€the€Retailersðð€Sales€Tax€Act€that€imposes€sales€taxes€on€sales€ofÏtangible€personal€property€is€ðð67„6„202.€€That€statute€includes€the€following:ÌÌÓÓà8 ààHØ Ø Ø àà8 à(a)€For€the€exercise€of€the€privilege€ofÏengaging€in€the€business€of€selling€tangible€personal€property€at€retail€òòin€thisÏstateóó,€a€tax€is€levied€at€the€rate€of€six€percent€(6%)€of€the€sales€price€of€eachÏitem€or€article€of€tangible€personal€property€when€sold€at€retail€òòin€this€stateóó;€.€.Ï.€(emphasis€added).ÌÌÌÓÓà àServices€are€taxable€under€Tenn.€Code€Ann.€ðð€67„6„205,€which€includes€theÏfollowing:ÌÌÓÓà8 àà8 à(a)€There€is€levied€a€tax€at€the€rate€of€six€percent€(6%)€of€theÍgross€charge€for€all€services€taxable€under€this€chapter.ÌÌÌÌÓÓà àThe€list€of€the€kinds€of€services€that€are€taxable€under€the€Retailersðð€Sales€Tax€Act€isÏcontained€in€Tenn.€Code€Ann.€ðð€67„6„102(23)(F).€€That€statute€includes€the€following:ÌÌÓÓà8 àà8 à(F)€ð ðRetail€sale,ðð€ð ðsale€at€retailðð€and€ð ðretail€sales€priceðð€includeÏthe€following€services:ÌÌà8 àà8 àà8 à.€.€.ÌÌà8 àà8 ààH0 0 0 àà8 à(vi)€The€installing€of€tangibleÏpersonal€property€which€remains€tangible€personal€propertyÏafter€installation€òòwhere€a€charge€is€made€for€such€installationóóÏwhether€or€not€such€installation€is€made€as€an€incident€to€theÏsale€thereof€and€whether€or€not€any€tangible€personal€propertyÏis€transferred€in€conjunction€with€such€installation€service.Ï(emphasis€added).ÌÌÌÌÓÓà àThe€definitional€provision€contained€in€Tenn.€Code€Ann.€ðð€67„6„102(23)(A)€setsÏforth€an€exception€to€the€imposition€of€sales€taxes€on€services,€as€well€as€an€exception€to€theÏimposition€of€sales€taxes€on€sales€of€tangible€personal€property.€€That€definitional€provisionÏincludes€the€following:ÌÌÓÓà8 ààHØ Ø Ø àà8 à(23)(A)€ð ðRetail€salesðð€or€ð ðsale€at€retailððÏmeans€a€taxable€sale€of€tangible€personal€property€or€òòspecifically€taxableÏservicesóó€to€a€consumer€or€to€any€person€òòfor€any€purpose€other€than€for€resaleóó.Ï(emphasis€added).ÌÌÌÌÓÓà àTenn.€Code€Ann.€ðð€67„6„313(a)€provides€an€exception€to€the€imposition€of€salesÏtaxes€for€certain€transactions€involved€in€interstate€commerce.€€That€provision€is€as€follows:ÌÌÓÓà8 àà8 à(a)€It€is€not€the€intention€of€this€chapter€to€levy€a€tax€uponÏarticles€of€tangible€personal€property€imported€into€this€state€òòoróóÏproduced€òòoróó€manufactured€in€this€state€for€export.€(emphasisÏadded).ÌÌÌÌÓÓà àTenn.€Code€Ann.€ðð€67„6„322€provides€an€exemption€from€the€imposition€of€salesÏtaxes€for€transactions€in€which€the€customer€is€a€type€of€organization€that€is€exempt€fromÏfederal€income€taxation€under€ðð501(c)€of€the€Internal€Revenue€code.€€That€statute€states€that,Ïð ðThere€is€exempt€from€the€provisions€of€this€chapter€any€sales€or€use€tax€upon€tangibleÏpersonal€property€or€taxable€services€sold,€given,€or€donated€to€any€(tax„exempt€organizationÏof€the€type€exempt€from€federal€income€taxation€under€ðð501(c€)€of€the€Internal€RevenueÏCode.)ððÌÌà àVirtually€all€of€the€foregoing€statutes€were€dealt€with€by€this€Court€in€an€opinionÏauthored€by€Chief€Justice€Anderson€in€òòEusco,€Inc.€v.€Huddlestonóó,€835€S.W.2d€576€(Tenn.Ï1992).€€The€facts€of€that€case€were€quite€similar€to€those€involved€in€this€case.€€The€taxpayerÏin€òòEuscoóó€sold€tangible€personal€property€and€provided€services€to€out„of„state€customers€andÏcharged€a€lump€sum€price€therefor.€€We€held€that€the€compensation€received€by€Eusco,€Inc.Ïfrom€the€out„of„state€customers€was€not€subject€to€taxation€under€the€Retailersðð€Sales€TaxÏAct.€€We€described€the€facts€in€òòEuscoóó€as€follows:ÌÌÓÓà8 àà8 àThe€taxpayer,€Eusco,€Inc.,€is€a€Tennessee€corporation€with€itsÏprincipal€place€of€business€in€White€House,€Tennessee.€€At€itsÏWhite€House€facility,€truck€bodies€and€related€components€areÏconstructed€for€electric€and€telephone€utility€trucks.€€In€theÍcourse€of€building€the€truck€bodies,€Eusco€uses€components€itÏfabricates€as€well€as€components€made€by€otherÏmanufacturers.ÌÌà8 àà8 àGenerally,€the€trucks€are€built€and€sold€by€using€one€of€twoÏdifferent€methods.€€In€some€cases,€a€bare€truck€cab€andÏchassis€is€purchased€directly€from€the€manufacturer,€such€asÏGeneral€Motors€or€Ford,€on€which€Eusco€then€builds€andÏattaches€the€truck€body€and€related€components.€€Once€theÏprocess€is€complete,€the€entire€utility€truck€is€sold€to€aÏtelephone€or€electric€company.ÌÌÌà8 àà8 àIn€other€cases,€a€bid€is€made€upon€a€specified€contract€with€aÏutility€company.€€When€Eusco€is€the€successful€bidder,€theÏutility€company€purchases€a€bare€truck€cab€and€chassis€from€aÏmanufacturer€and€causes€it€to€be€delivered€by€common€carrierÏto€the€White€House€facility.€€Under€the€contract,€a€truck€bodyÏand€related€components€are€then€fabricated€and€attachedÏaccording€to€the€purchaserððs€specifications,€and€the€completedÏtruck€is€delivered€to€the€utility€companyððs€place€of€business.€ÏThis€kind€of€transaction€is€referred€to€as€a€ð ðdrop€shipmentððÏsale.€ÌÌà8 àà8 àOn€October€3,€1989,€after€being€audited€by€the€TennesseeÏDepartment€of€Revenue€for€the€period€of€December€1985Ïthrough€June€1989,€Eusco€was€assessed€a€deficiency€in€salesÏtaxes€and€interest€of€$202,182.€€The€assessment€at€issue€hereÏis€sales€taxes€and€interest€of€$78,337€upon€nine€ð ðdropÏshipmentðð€sales€to€out„of„state€customers.ÌÌà8 àà8 àThe€Commissioner€taxed€the€ð ðdrop€shipmentðð€sales€on€theÏbasis€of€Tenn.€Code€Ann.€ðð€ðð€67„6„201(1)(1983€&€1989)€andÏ67„6„202(1983€&€1989),€which€levy€a€tax€upon€ð ðthe€businessÏof€selling€tangible€personal€property€at€retail€in€this€state.ðð€€InÏaddition,€the€Commissioner€taxed€the€ð ðdrop€shipmentðð€salesÏon€the€basis€of€Tenn.Code€Ann.ðððð67„6„102(13)(F)(vi)(1983)Ïand€67„6„102(22)(F)(vi)(1989)€[now€ðð67„6„102(23)(F)(vi)],Ïwhich€provide€that€taxable€retail€sales€shall€include€ð ð[t]heÏinstalling€of€tangible€personal€property€.€.€.€€where€a€charge€isÏmade€for€such€installation.ðð€ÌÌÌ835€S.W.2d€€at€577„78.ÌÌÌÌÓÓà àWe€concluded€in€òòEuscoóó€that€the€transactions€involved€were€not€taxable€as€sales€ofÏtangible€personal€property,€because€the€sales€did€not€occur€within€the€State€of€Tennessee.€€InÏthis€regard,€we€provided€the€following€analysis:ÌÌÓÓà8 àà8 àThe€first€issue€we€address€is€whether€the€plaintiffððs€sales€toÏout„of„state€customers€were€taxable€as€retail€sales€ð ðin€thisÏstateðð€under€Tenn.€Code€Ann.€ðð€67„6„201(1)(1983€&€1989)Ïand€ðð€67„6„202(1983€&€1989).€ð ðThe€elements€necessary€toÏconstitute€a€sale€are€(1)€transfer€of€title€or€possession,€or€€bothÏof€(2)€tangible€personal€property,€for€a€(3)€consideration.ððÏòòHearthstone,€Inc.€v.€Moyersóó,€809€S.W.2d€888,€890€(Tenn.Ï1991)(quoting€òòVolunteer€Val„Pak€v.€Celauroóó,€767€S.W.2dÏ635,€636€(Tenn.€1989)).€€òòSeeóó€òòalsoóó€Tenn.€Code€Ann.ðððð67„6„102(23)(A)(1989)€and€67„6„102(14)(A)(1983).€€Since€it€isÏclear€that€there€was€a€transfer€of€tangible€personal€€propertyÏfor€a€consideration,€we€must€determine€whether€the€nine€ð ðdropÏshipmentðð€sales€involved€a€transfer€of€title€or€possession€to€theÏutility€companies€in€Tennessee€so€as€to€make€them€taxableÏretail€sales€ð ðin€this€state.ððÌÌà8 àà8 àFor€Tennessee€sales€tax€purposes,€the€place€where€title€toÏtangible€personal€property€is€transferred€to€the€buyer€isÏdetermined€under€the€applicable€provisions€of€the€UniformÏCommercial€Code.€.€.€.ÌÌà8 àà8 àAll€of€the€ð ðdrop€shipmentðð€sales€at€issue€in€this€case€wereÏF.O.B.€to€the€utility€companiesðð€places€of€business,€and€thereÏwere€no€other€aggreements€between€Eusco€and€the€utilityÏcompanies€as€to€when€or€where€title€to€the€truck€bodiesÏpassed.€€Title€to€the€truck€bodies€therefore€passed€to€the€utilityÏcompanies€when€Eusco€completed€its€performance€byÏdelivering€the€trucks€out„of„state€to€their€places€of€business.ÌÌà8 àà8 à.€.€.ÌÌà8 àà8 àWe€conclude€that€title€and€possession€of€the€truck€bodies€wasÏtransferred€outside€the€State€of€Tennessee€when€EuscoÏemployees€delivered€the€trucks€to€the€utility€companiesðð€placesÏof€business€in€accordance€with€the€F.O.B.€delivery€terms€ofÍthe€contracts.€€Since€Euscoððs€sales€and€deliveries€of€the€truckÏbodies€to€out„of„state€utility€companies€did€not€involveÏtransfers€of€title€or€possession€of€tangible€personal€property€inÏTennessee,€we€hold€that€the€ð ðdrop€shipmentðð€sales€were€notÏtaxable€sales€at€retail€ð ðin€this€state.ðð€ÌÌÌ835€S.W.2d€€at€579„80.ÌÌÌÌÓÓà àWe€also€concluded€in€òòEuscoóó€that€the€transactions€with€out„of„state€customers€wereÏnot€taxable€as€ð ðinstallation€servicesðð€under€Tenn.€Code€Ann.€ðð€67„6„102(23)(F)(vi).€€In€thisÏregard,€we€observed€as€follows:ÌÌÓÓà8 àà8 àWhile€it€is€true€that€a€substantial€part€of€Euscoððs€costs€were€forÏpurchasing€and€installing€the€hydraulic€booms,€òòEusco€madeÏno€separate€charge€for€installation€services€as€is€required€forÏthe€application€of€Tenn.€Code€Ann.€ðð€67„6„102(22)(F)(vi)óóÏ[now€67„6„102(23)(F)(vi)].€€In€each€of€the€sales,€the€contractÏprovided€for€one€price€which€covered€all€personal€propertyÏand€labor€involved€in€building€and€attaching€the€truck€body,Ïincluding€all€component€parts.€(emphasis€added).ÌÌ€835€S.W.2d€€at€581.ÌÌÌÌÓÓà àThis€Court€further€stated€in€òòEuscoóó€as€follows:ÌÌÓÓà8 àà8 àThe€Retailersðð€Sales€Tax€Act€defines€ð ðretail€salesðð€or€ð ðsale€atÏretailðð€as€ð ða€taxable€sale€of€tangible€personal€property€orÏspecifically€taxable€services€to€a€consumer€or€to€any€personÏfor€any€purpose€òòother€than€for€resaleóó.ðð€€Tenn.€Code€Ann.€ððÏ67„6„102(13)(A)(1983);€Tenn.€Code€Ann.€ðð€67„6„102(22)(A)(1989)€[€now€ðð€67„6„102(23)(A)]€(emphasisÏadded).€€Items€sold€for€resale,€therefore,€are€exempt€from€theÏdefinition€of€ordinary€retail€sales€.€.€.ðð€€ÌÌÌ835€S.W.2d€€at€582.ÌÌÌÌÓÓà àWe€also€determined€in€òòEuscoóó€that€the€exemption€from€taxation€for€interstateÏcommerce€contained€in€Tenn.€Code€Ann.€ðð€67„6„313(a)€applied.€€This€determination€wasÏpredicated€on€our€finding€that€the€taxpayer€in€that€case€was€a€ð ðmanufacturer.ðð€€However,€aÏtaxpayerððs€being€a€ð ðmanufacturerðð€is€not€a€prerequisite€for€the€application€of€Tenn.€CodeÏAnn.€ðð€67„6„313(a).€€This€statute€applies,€when€the€export€requirement€is€met,€to€items€ofÏtangible€personal€property€that€are€(i)€imported€into€this€state,€(ii)€produced€in€this€state,€orÏ(iii)€manufactured€in€this€state.€€There€is€no€requirement€that€the€taxpayer€involved€be€aÏð ðmanufacturer.ððÌÌà àIn€òòEuscoóó,€this€Court€rejected€the€Department€of€Revenueððs€contention€thatÏòòLeTourneau€Sales€&€Services,€Inc.€v.€Olsenóó,€691€S.W.2d€531€(Tenn.€1985),€applied.€€TheÏlatter€case€involved€Tenn.€Code€Ann.€ðð€67„6„102(23)(F)(iv),€which€includes€within€theÏdefinition€of€ð ðretail€sale,ðð€ð ðsale€at€retail,ðð€and€ð ðretail€sales€priceðð€ð ð(iv)€the€performing€for€aÏconsideration€of€any€repair€services€with€respect€to€any€kind€of€tangible€personal€property.ðð€ÏThe€Department€of€Revenue€makes€a€similar€argument€in€this€case.€€Based€on€theÏuncontradicted€affidavit€of€Ernest€W.€Colbert€(that€Colemill€Enterprises,€Inc.ððs€services€doÏð ðnot€involve€correcting€any€problem,€defect,€or€malfunctionðð),€Tenn.€Code€Ann.€ðð€67„6„102(23)(F)(iv)€has€no€more€applicability€in€this€case€than€it€did€in€òòEuscoóó.€ÌÌà àBased€on€the€provisions€of€the€Retailersðð€Sales€Tax€Act€quoted€above€and€on€thisÍCourtððs€analysis€in€òòEuscoóó,€we€conclude€that€the€sale€of€tangible€personal€property€byÏColemill€Enterprises,€Inc.€to€Bessemer€Plywood€Corporation€was€not€taxable€because€it€wasÏa€sale€for€resale.€€If€such€sale€was€F.O.B.€to€an€out„of„state€destination€(as€was€the€sale€toÏFiltrex,€Inc.),€then€the€sale€to€Bessemer€Plywood€Corporation€was€not€subject€to€taxation€asÏa€sale€of€tangible€personal€property€for€the€additional€reasons€(i)€that€it€occurred€outside€theÏState€of€Tennessee€and€(ii)€that€the€interstate€commerce€exemption€applies.€€ColemillÏEnterprises,€Inc.ððs€transaction€with€Bessemer€Plywood€Corporation€was€not€taxable€asÏð ðinstallation€servicesðð€because€(i)€no€separate€charge€was€made€for€installation€services,€andÏ(ii)€it€was€a€sale€for€resale.€€If€the€transaction€was€F.O.B.€to€an€out„of„state€designation,€thenÏthe€transaction€was€not€taxable€ð ðinstallation€servicesðð€for€the€additional€reasons€(i)€that€itÏoccurred€outside€the€state€of€Tennessee€and€(ii)€that€the€interstate€commerce€exemptionÏapplies.ÌÌà àBased€on€the€same€analysis,€the€taxpayerððs€sale€of€tangible€personal€property€toÏFiltrex,€Inc.€was€not€a€taxable€sale€of€tangible€personal€property€because€(i)€€it€occurredÏoutside€the€state€of€Tennessee,€and€(ii)€the€interstate€commerce€exemption€applies.€€Such€saleÏto€Filtrex,€Inc.€may€be€exempt€from€taxation€for€the€additional€reason€that€Filtrex,€Inc.Ïqualifies€as€a€tax€exempt€entity€under€Tenn.€Code€Ann.€ðð€67„6„322.€€The€transaction€withÏFiltrex,€Inc.€was€not€taxable€ð ð€installation€servicesðð€because€(i)€no€separate€charge€was€madeÏfor€the€installation€services€and€(ii)€the€interstate€commerce€exemption€applies.€€TheÏexemption€for€tax€exempt€organizations€may€also€apply€with€respect€to€the€installationÏservices€issue.ÌÌà@ àòòò òCONCLUSIONóóó óÌÌà àWe€conclude€that€neither€the€transaction€with€Bessemer€Plywood€Corporation€nor€theÏtransaction€with€Filtrex,€Inc.€involved€a€taxable€sale€of€tangible€personal€property€or€taxableÏinstallation€services.€€Having€reached€this€conclusion,€we€find€it€unnecessary€to€address€theÏother€issues€presented€in€the€respective€applications.€€This€case€is€remanded€to€the€trial€courtÏfor€entry€of€summary€judgment€in€favor€of€Colemill€Enterprises,€Inc.€and€the€awarding€ofÏreasonable€attorneyððs€fees€and€expenses€of€litigation,€which€are€mandatory€under€Tenn.ÏCode€Ann.€ðð€67„1„1803(d).€òòSeeóó€€òòCarson€Creek€Vacation€Resorts€v.€Department€of€RevenueóóÏ865€S.W.2d€1,€2€(Tenn.€1993).ÌÌÓÓà àà àà àà àà àà à____________________________________Ìà àà àà àà àà àà àFrank€F.€Drowota,€III,€JusticeÌÌò òConcur:ó óÌÌAnderson,€C.€J.ÌBirch€and€Holder,€J.ÌÌReid,€J.€„€Not€participating.