A taxpayer that manufactured signs was held to be a contractor for Texas sales tax purposes and as a result, was not eligible to claim a manufacturing exemption on its purchase of utilities, equipment, and materials used in manufacturing the signs. A taxpayer that incorporates the items it produces into real property is acting as a contractor. The taxpayer failed to prove that the signs remained tangible personal property and did not become improvements to realty once they were installed. The taxpayer did not submit photographs, design documents or drawings. Additionally, the provisions in the parties’ standard purchase and lease agreements were not particularly persuasive. Even if some of the signs were not incorporated into the realty, the taxpayer failed to show what portion of the equipment, supplies, and utilities was used to manufacture signs that might have retained their character as tangible personal property after installation. If the taxpayer was determined to be a manufacturer, its claim for an electricity exemption still would have been denied because its predominant use study did not comply with statutory requirements. No statute or rule supported the taxpayer’s other contention that items used to manufacture signs shipped out of state were exempt.(Decision, Hearing No. 104,873, Texas Comptroller of Public Accounts, May 9, 2012, released July 2012)