An Indiana company’s contracts for real property improvements were deemed to be time and materials contracts subject to sales tax, not nontaxable lump-sum contracts, despite the fact that customers paid the entire contract price when the contract was executed. A contract is lump-sum when all materials and labor are provided for one specified price. In a time and materials contract, materials and labor are sold for separately quoted prices. In this case, the company listed labor and materials as separate components on the invoice, but charged a single negotiated price for all items required to complete the contracted work. A number of factors show the company’s contracts to be inconsistent with a true lump-sum contract. A contract clause permits discounts on the combined price of materials and labor when products are sold with installation. Additionally, another clause provides for procedures to allow customers to purchase a water heater for installation without separate charges for installation. Finally, the company lists offers for discounted or free installation on its website. (Letter of Findings No. 04-20110020, Indiana Department of Revenue, January 25, 2012)