COLEMILL ENTERPRISES, INC.,        )
                                   )
      Plaintiff/Appellant,         )    Appeal No.
                                   )    01-A-01-9605-CH-00218
v.                                 )
                                   )    Davidson Chancery
JOE HUDDLESTON, Commissioner of    )    No. 94-3217-I
Tennessee Department of Revenue,   )

      Defendant/Appellee.
                                   )
                                   )                    FILED
                                                        December 4, 1996
                COURT OF APPEALS OF TENNESSEE
                                                        Cecil W. Crowson
                 MIDDLE SECTION AT NASHVILLE           Appellate Court Clerk



     APPEAL FROM THE CHANCERY COURT FOR DAVIDSON COUNTY

                    AT NASHVILLE, TENNESSEE


     THE HONORABLE IRVIN H. KILCREASE, JR., CHANCELLOR




RICHARD L. COLBERT
Cornelius & Collins
Suite 2700
Nashville City Center
511 Union Street
P. O. Box 190695
Nashville, Tennessee 37219
     ATTORNEY FOR PLAINTIFF/APPELLANT



CHARLES W. BURSON
Attorney General and Reporter

STEVEN M. RODERICK
Assistant Attorney General
Attorney General's Office
Tax Division
404 James Robertson Parkway
Suite 2121
Nashville, Tennessee 37243-0489
     ATTORNEYS FOR DEFENDANT/APPELLEE




                       AFFIRMED AND REMANDED
                                             SAMUEL L. LEWIS, JUDGE
                             O   P I N I O N


        This   is    an    appeal   by   plaintiff/appellant,   Colemill

Enterprises, Inc. ("Colemill"), from a decision of the chancery

court which affirmed the determination of defendant/appellee, Joe

Huddleston, Commissioner of the Tennessee Department of Revenue

("Commissioner"), that Colemill owed certain state and local sales

and use taxes.      The facts out of which this matter arose are as

follows.



        Colemill's business involves aircrafts.           In addition to

other   services,    Colemill    performs   aircraft   conversions.   To

explain, Colemill alters an aircraft by introducing major changes

in the original type design of the aircraft.           The major changes

include changes in engine, propellers, wings, and other fundamental

parts of the aircraft.      These changes alter the aircraft such that

the aircraft leaves Colemill with a new type designation, new

performance characteristics, a new Pilot's Operating Handbook, and

a new Federal Aviation Administration ("FAA") approved Flight

Manual Supplement.        In order to perform this service, Colemill

holds supplemental type certificates issued to it by the FAA.

Colemill must follow the product design approved by the FAA and

upon which the supplemental type certificates are based.         Federal

law prohibits Colemill from introducing unapproved variations into

the conversion process.



        The Commissioner performed a sales and use tax audit of

Colemill's books and records for the period of January 1991 through

March 1994. The Commissioner concluded that Colemill's conversions

were installation services performed in Tennessee and therefore

subject to taxation pursuant to Tennessee Code Annotated section

67-6-201(1). In addition, the Commissioner concluded that Colemill


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was subject to certain local sales and use taxes pursuant to

Tennessee Code Annotated section 67-6-702(a).                   Based on these

conclusion, the Commissioner assessed a tax liability against

Colemill in the amount of $20,714.00.



           Colemill filed this action on 21 October 1994 challenging

the tax assessment.           Colemill alleged that its conversions were

exempt because they were manufactured for export.               Tenn. Code Ann.

§ 67-6-313(a)(1994 & Supp. 1996).            Colemill also alleged that the

Commissioner improperly assessed the local sales and use tax

because it considered the sale of each installed aircraft part as

a   sale    of   a   single    article   instead      of   treating    the   entire

conversion as a single article and because it failed to apply the

$1,600.00 cap found in Tennessee Code Annotated section 67-6-

702(a)(1).



           The trial court entered its final judgment on 26 February

1996.      The court granted the Commissioner's motion for summary

judgment     and     denied   Colemill's     motion    for   summary    judgment.

Specifically, the court held that Colemill did not manufacture

aircrafts for export.            Instead, the court held that Colemill

provided an installation service subject to Tennessee sales and use

tax.       In addition, the court concluded that the Commissioner

properly assessed the local sales and use tax due on the sale of

the conversions.        The court awarded the Commissioner a judgment

against     Colemill    in    the   amount   of   $23,946.65    and    reasonable

attorney's fees.



           Colemill filed its notice of appeal on 29 February 1996 and

presented the following issues.

           I.   Did the Chancellor err in concluding that
           Colemill's conversion sales were taxable as
           "installation services" under Tenn. Code Ann. § 67-
           6-102(23)(F)(vi)?
           II. Did the Chancellor err in concluding that

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        Colemill is not a manufacturer or producer of its
        "conversions" for purposes of Tenn. Code Ann. § 67-
        6-313(a)?
        III. Did the Chancellor err in concluding that the
        single article limitation on local option sales
        taxes under Tenn. Code Ann. § 67-6-702(d) does not
        apply to Colemill's "conversions?"



I.    Whether Colemill's conversion sales were taxable as
installation services under Tennessee Code Annotated section 67-6-
102(23)(F)(vi).



        Colemill contends that Tennessee Code Annotated section 67-

6-102(23)(F)(vi)    only      taxes   installation     services    that   are

separately invoiced. In support of this conclusion, Colemill cites

the rule that taxing statutes are to be construed in favor of the

taxpayer and the decision in Eusco, Inc. v. Huddleston, 835 S.W.2d

576 (Tenn. 1992).



        A.   Statutory Arguments



        Tennessee Code Annotated title 67, chapter 6 provides that

any person who "[e]ngages in the business of selling tangible

personal property at retail" in Tennessee is exercising a taxable

privilege.   Tenn. Code Ann. § 67-6-201(1)(1994).         A sale at retail

includes the provision of certain services such as the following:

        The installing of tangible personal property which
        remains    tangible    personal    property    after
        installation where a charge is made for such
        installation whether or not such installation is
        made as an incident to the sale thereof and whether
        or   not   any   tangible   personal   property   is
        transferred in conjunction with such installation
        services . . . .

Id. § 67-6-102(23)(F)(vi)(1994 & Supp. 1996).



        We   are   of   the    opinion    that   the   rule   of   statutory

construction relied upon by Colemill does not apply to the instant

case.   This court finds no need to construe the unambiguous

language of Tennessee Code Annotated section 67-6-102(23)(F)(vi).


                                      4
The section is not susceptible to a two-fold meaning.                   Therefore,

this court does not need to construe it.                Middleton v. Allegheny

Elec. Co., 897 S.W.2d 695, 698 (Tenn. 1995); Kendrick v. Kendrick,

902 S.W.2d 918, 923 (Tenn. App. 1994); Tennessee Manufactured Hous.

Ass'n v. Metropolitan Gov't of Nashville, 798 S.W.2d 254, 257

(Tenn. App. 1990).       Because the statute is unambiguous, we must

determine the scope and meaning of Tennessee Code Annotated section

67-6-102(23)(F)(vi) by looking to the plain language contained

within the      four   corners    of    the   statute    without      resorting   to

statutory construction.           Carson Creek Vacation Resorts, Inc. v.

State, 865 S.W.2d 1, 2 (Tenn. 1993).                Because there is no need to

construe the statute, Colemill's reliance on the general rule of

statutory construction is misplaced.



        Here, the language of the statute is plain and unambiguous.

Thus,   the   ordinary      and   natural     meaning     of    the   language    is

conclusive.      The legislative intent is clearly expressed on the

face of the statute, and the courts should implement this intent.

Fultz v. Gilliam, 942 F.2d 396, 400 (6th Cir. 1991); Carson Creek,

865 S.W.2d at 2.       The legislative intent expressed on the face of

Tennessee Code Annotated section 67-6-102(23)(F)(vi) is to tax

certain installation services, not to make the statute's taxing

mandate dependant on the taxpayer's method of invoicing.



        The interpretation of the statute indicated by Colemill

contradicts the intent of the legislature and leads to an absurd

result that the text of the statute does not support.                 The language

of the statute does not show that the legislature intended the

statute to require providers to separately invoice charges for

installing tangible personal property as a condition to taxation.

The   statute    requires    only      that   the    provider    charge   for     the

services, not render them gratuitously, and that any tangible


                                         5
personal property installed remain tangible personal property after

installation.



          We also reject Colemill's interpretation of the statute

because    it   is   a   forced    construction   that    impermissibly     and

arbitrarily     restricts    the   section's    scope    to   less   than   that

intended by the legislature.         Carson Creek, 865 S.W.2d at 2.          The

interpretation put forward by Colemill effectively amends the

statute by adding a completely new requirement not contemplated by

the legislature.         We cannot insert extra statutory requirements

into a statute's text under the guise of statutory construction.

See Loftin v. Langsdon, 813 S.W.2d 475, 480 (Tenn. App. 1991).                It

is not necessary that this statute be construed, only read, in

order to conclude that by its terms the statute levies a sales and

use tax on the installation services provided by Colemill.



          B.    Eusco v. Huddleston



          We are also of the opinion that Eusco v. Huddleston, 835

S.W.2d 576 (Tenn. 1992), does not support Colemill's argument that

the provider must separately invoice an installation charge for it

to be taxable under the statute.               Colemill contends that the

following language supports its argument.

               While it is true that a substantial part of
          Eusco's costs were for purchasing and installing
          the hydraulic booms, Eusco made no separate charge
          for installation services as is required for the
          application   of   Tenn.   Code   Ann.   §   67-6-
          102(23)(F)(vi). In each of the sales, the contract
          provided for one price which covered all personal
          property and labor involved in building and
          attaching the truck body, including all component
          parts.

Eusco, 838 S.W.2d at 581.



          We are of the opinion that Colemill's interpretation of

Eusco is without merit.        Our reading of Eusco leads us to believe

                                       6
that it requires only that a true and distinct charge be made for

the installation services.           The installer must charge for the

service he provides and not render it gratuitously.



         Because    installation     service         providers      often    provide

tangible personal property and then install it as part of the

transaction, the variety of mixed transactions that can arise under

this statute are numerous.         For example, it is not uncommon for

dealers to offer free installation of the goods they sell as an

incentive to customers to purchase the goods.                 Such cases are not

taxable because no true and distinct charge is made for the

installation of the tangible personal property.                  However, where a

dealer   provides   tangible     personal      property,      installs       it,   and

charges the customer for the installation there is a true and

distinct charge for the installation separate from the charges made

for the goods regardless of whether the installation charge is

separately itemized on the invoice.



         The court's use of the term "separate charge" in Eusco

describes     exactly    the   charges       Colemill     routinely     makes      for

installing aircraft parts onto its customer's aircraft.                     These are

true and distinct charges made in the course of a mixed transaction

where tangible personal property is provided and installed with a

charge being levied for both.         A customer is charged for the high

performance     parts     Colemill    provides          and   for     the     highly

sophisticated labor it takes to install those parts.                    Neither is

gratuitous and both are separate from the other.               The fact that the

sale and installation of the parts occurs fairly close in time to

each other in the course of a conversion does not obviate the

separate identity of the transaction's components nor alter the

fact   that   Colemill    does   indeed       make    a   separate     charge      for

installing aircraft parts onto its customer's planes.



                                         7
          C.    Conclusions



          Colemill attempts to have us adopt an interpretation of the

statute which makes the tax dependent on the manner of invoicing

used by the service provider.       This is contrary to the mandate of

the legislature expressed in Tennessee Code Annotated section 67-6-

102(23)(F)(vi).      While it might be easier for the Department of

Revenue    to   administer    Tennessee   Code   Annotated   section   67-6-

102(23)(F)(vi)     if   the   taxpayers   itemized   their   invoices,   the

legislature did not intend such a requirement nor did the Supreme

Court of Tennessee impose such a requirement.          Colemill's failure

to separately invoice the installation charge does not release

Colemill from the clear operation of the statute.            The chancellor

correctly held that Colemill's installations were taxable under the

statute.



II.    Whether Colemill is a manufacturer or producer of its
conversions for the purposes of Tennessee Code Annotated section
67-6-313(a).



          Colemill argues that it is entitled to the exemption found

in Tennessee Code Annotated section 67-6-313(a).              This section

provides that "[i]t is not the intention of this chapter to levy a

tax upon articles of tangible personal property imported into this

state or produced or manufactured in this state for export." Tenn.

Code Ann. § 67-6-313(a)(1994 & Supp. 1996).            Colemill maintains

that Tennessee Code Annotated section 67-6-313(a) exempts it from

the sales and use tax because it manufactured the aircrafts for

export.



          "Every presumption is against the exemption and a well-

founded doubt is fatal to the claim."            Tibbals Flooring Co. v.

Huddleston, 891 S.W.2d 196, 198 (Tenn. 1994).          Moreover, Colemill



                                     8
bears the heavy burden of proving its entitlement to the exemption

because no exemption will be implied and because this court must

construe the statutory exemption against Colemill.                LeTourneau

Sales & Serv. v. Olsen, 691 S.W.2d 531, 534 (Tenn. 1985).                 Our

review of this record, LeTourneau, and Eusco convinces us that the

chancellor correctly held that Colemill did not manufacture its

aircraft conversions.



III.   Whether the single article limitation on local option sales
tax under Tennessee Code Annotated section 67-6-702(d) applies to
Colemill's conversions.



          Colemill considered each sale of its conversions to be the

sale or use of a single article of personal property for purposes

of the local sales and use tax.        The Commissioner argued that this

treatment of the conversions was incorrect and resulted in Colemill

remitting tax, not on the proper amount, but only on the first

$1,600.00 charged for each conversion.           It is the Commissioner's

argument that under Tennessee Code Annotated section 67-6-702(a)(1)

Colemill should have remitted taxes on the full amount it charged

for its installation services and on the sales price of each

aircraft part it sold up to the $1,600.00 cap.1



          Colemill did not invoice its charges for installation

separately    from   its   charges   for   selling   the   aircraft    parts.

Therefore, the Commissioner could not determine what portion of

Colemill's charges were subject to the $1,600.00 cap and which

      1
       Tennessee Code Annotated section 67-6-702 provides, in pertinent part,
as follows:
      Tax authorized - Rates - Termination of services tax. - (a)(1) Any
      county by resolution of its county legislative body or any
      incorporated city or town by ordinance of its governing body is
      authorized to levy a tax on the same privileges subject to this
      chapter as the same may be amended, which are exercised within
      such county, city or town, to be levied and collected in the
      samemanner and on all such privileges but not to exceed two and
      three-fourths percent (2 3/4 %); provided, that the tax levied
      shall apply only to the first one thousand six hundred dollars
      ($1,600) on the sale or use of any single article of personal
      property.
Tenn. Code Ann. § 67-6-702(a)(1)(1994 & Supp. 1996).

                                      9
charges were not.       Thus, the Commissioner taxed Colemill on the

full amount it charged for its conversions.



         The Commissoner argued that its assessment was correct for

two reasons.        First, the Commissioner properly levied the tax

because the $1,600.00 cap did not apply to installation services

meaning the taxable amount was the full amount Colemill charged for

its installation services.            Second, because each aircraft part

installed     by   Colemill   is    commonly   understood   to   be   a   single

article, the Commissioner correctly disallowed Colemill's attempt

to characterize the entire conversion as a single article and

properly assessed the tax on the full conversion price.                   Because

Colemill presented no itemized invoices, assessing tax on the full

conversion price was the only way the Commissioner could insure

that the full amount of the installation services were taxed and

that the aircraft parts were properly taxed as single articles.



         A.    Installation Services



         Pursuant to the statute, local governments in Tennessee are

plainly authorized to levy taxes on any privilege deemed taxable in

title 67, chapter 6. Tenn. Code Ann. § 67-6-702(a)(1)(1994 & Supp.

1996).      One taxable privilege is installing tangible personal

property for a charge.             Id. 67-6-102(23)(F)(vi).      Thus, local

governments can and do levy a tax of up to 2 3/4 percent on

installation services rendered within their taxing jurisdictions.

We are also of the opinion that the statute plainly provides that

local governments may tax the entire amount of the taxable service

provided.     Unlike the sale or use of personal property, services

are not subject to the statute's restriction that local governments

may levy a tax only on the first $1,600.00 charged for each single

article of personal property.                The legislature has expressly



                                        10
limited the $1,600.00 cap only to the sale or use of personal

property and, by doing so, authorized local governments to tax the

full price charged for those services identified as taxable by

title 67, chapter 6.     See id. § 67-6-702(a)(1).    The chancellor

correctly held that the Department of Revenue properly assessed the

local sales and use tax against Colemill on the total amount

charged for its installation services.



          B.   Separate Articles



          We are of the opinion that the chancellor correctly held

that the aircraft parts installed by Colemill were each single

articles subject to the local sales and use tax under Tennessee

Code Annotated section 67-6-702.        The relevant portion of that

statute provides:

          (d) "Single article" means that which is regarded
          by common understanding as a separate unit
          exclusive of any accessories, extra parts, etc.,
          and that which is capable of being sold as an
          independent unit or as a common unit of measure, a
          regular billing or other obligation.           Such
          independent units sold in sets, lots, suites, etc.,
          at a single price shall not be considered a single
          article.

Tenn. Code Ann. § 67-6-702(d)(Supp. 1996).



          An oil pump is separate and distinct from a hose or an

engine.    The fact that a provider may install all of these parts at

the same time and as part of the same service does not alter their

nature as separate, functional units.     By common understanding, an

oil pump or an engine perform their functions independently, have

intrinsic value, and do not lose their separate identity simply

because they become part of an aircraft.      Colemill relies heavily

on the fact that the FAA requires that some of these aircraft parts

be installed with certain other parts as part of a conversion;

however, we find this argument unpersuasive. The fact that the oil



                                   11
pump is one of many parts Colemill installs in the course of an FAA

approved conversion does not alter the identity of an oil pump as

a single, individual part of an aircraft.



          Further, two decisions of the Tennessee Supreme Court

support    the   Commissioner's     assertion        that    each    aircraft   part

Colemill installs is a single article.              Executone of Memphis, Inc.

v. Garner, 650 S.W.2d 734 (Tenn. 1983); Honeywell Information Sys.,

Inc. v. King, 640 S.W.2d 553 (Tenn. 1982).                  In both Executone and

Honeywell the taxpayers argued, as Colemill does in the instant

case, that because the components sold were interdependent and

conveyed together as a part of a whole system they were not single

articles, but rather the sum of the system was a single article.

The supreme court rejected these arguments in both of the foregoing

cases.    Executone, 650 S.W.2d at 736-37; Honeywell, 640 S.W.2d at

554.    We likewise reject Colemill's argument in the instant case.

The    chancellor   correctly   held      that      the   Commissioner    properly

calculated the local sales and use tax assessment.



IV.       Conclusion



          We have considered each of the arguments of Colemill and

find them to be without merit.            Finally, we have considered the

Commissioner's      motion   that   it        be   awarded    attorney   fees    and

litigation expenses under Tennessee Code Annotated section 67-1-

1803 and are of the opinion that this is not a proper case for the

award of such fees.



          Therefore, it results that the judgment of the chancellor

is in all things affirmed, and the cause is remanded to the

chancery court for further necessary proceedings.                   Costs on appeal

are taxed to plaintiff/appellant, Colemill Enterprises, Inc.


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                                __________________________________
                                SAMUEL L. LEWIS, JUDGE
CONCUR:

_________________________________
BEN H. CANTRELL, JUDGE

_________________________________
WILLIAM C. KOCH, JR., JUDGE




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