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example, a gasoline pump, hydraulic car lift or automatic vending machine, although
annexed to the ground, is considered tangible personal property.
Treas. Reg. § 1.48-1(c) also provides that local law is not controlling for purposes of
determining whether property is or is not “tangible” or “personal”. Thus, the fact that under
local law property is held to be personal property or tangible property is not controlling.
Conversely, property may be personal property for purposes of the ITC even though under
local law the property is considered to be a fixture and therefore real property.
Treas. Reg. § 1.48-1(d) provides that in addition to tangible personal property, any other
tangible property (but not including a building and its structural components) used as an
integral part of manufacturing, production, or extraction, or as an integral part of furnishing
transportation, communications, electrical energy, gas, water, or sewage disposal services
by a person engaged in a trade or business of furnishing any such service, or which
constitutes a research or storage facility used in connection with any of the foregoing
activities, may qualify for the ITC. This regulation essentially provides that inherently
permanent structures (but not a building and its structural components) used in certain
business activities will be deemed eligible for the ITC.
Treas. Reg. § 1.48-1(e)(1) defines a "building" as any structure or edifice enclosing a space
within its walls, and usually covered by a roof, the purpose of which is, for example, to
provide shelter or housing, or to provide working, office, parking, display, or sales space.
The term includes, for example, structures such as apartment houses, factory and office
buildings, warehouses, barns, garages, railway or bus stations, and stores. Such term
includes any such structure constructed by, or for, a lessee even if such structure must be
removed, or ownership of such structure reverts to the lessor, at the termination of the
lease.
Specifically excluded from the definition of the term "building" are: (i) a structure which is
essentially an item of machinery or equipment, or (ii) a structure which houses property
used as an integral part of an activity specified in former § 48(a)(1)(B)(i) if the use of the
structure is so closely related to the use of such property that the structure clearly can be
expected to be replaced when the property it initially houses is replaced. Factors which
indicate that a structure is closely related to the use of the property it houses include the
fact that the structure is specifically designated to provide for the stress and other demands
of such property and the fact that the structure could not be economically used for other
purposes. Thus, the term “building” does not include such structures as oil and gas storage
tanks, grain storage bins, silos, fractionating towers, blast furnaces, basic oxygen furnaces,
coke ovens, brick kilns, and coal tipples.
Treas. Reg. § 1.48-1(e)(2) provides that "structural components" includes such parts of a
building as walls, partitions, floors, and ceilings, as well as any permanent coverings
therefor such as paneling or tiling; windows and doors; all components (whether in, on, or
adjacent to the building) of a central air conditioning or heating system, including motors,
compressors, pipes and ducts; plumbing and plumbing fixtures, such as sinks and
bathtubs; electric wiring and lighting fixtures; chimneys; stairs, escalators, and elevators,