Glossary · Activities & Property
System
In short
A group of interdependent parts forming a unified whole. Like component, it exists to make replacement work.
In full
A regularly interacting or interdependent group of items, or components, forming a unified whole. ADOR's examples are a roofing system, which includes shingles, lining and nails; an HVAC system, which includes the heating and cooling unit, air filtration, furnace or boiler and ducting; and a plumbing system, which includes sink bowls, handles, faucets and pipes.
The practical value is scope. Re-roofing a house is replacement of a system, not a series of separate repairs, and replacement carries no threshold. The same work described as an improvement to the building rather than as replacement of its roofing system would be tested as alteration against a threshold instead.
The term carries no independent tax consequence. It is one of the three objects the statutory definition of replacement is built on, alongside component and tangible personal property installed in existing property.
ADOR MRRA Contracting page; ADOR Evaluating Mixed Construction Contracts worksheet, step 1a