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Business Taxes Law Guide—Revision 2024
Sales And Use Tax Court Decisions
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A. S. Schulman Electrical Co. v. State Board of Equalization … (1975)
Assembly of Electrical Power Transmission and Distribution Facilities Not Taxable Fabrication Labor
Prior to 1965, plaintiff assembled and erected steel towers for a public utility from components furnished by the utility, and also erected wooden poles furnished by the utility. Section 6016.5, effective September 17, 1965, declared that for purposes of sales and use tax law, "tangible personal property" does not include telephone and telegraph lines, electrical transmission and distribution lines, and the poles, towers, or conduits by which they are supported. Prior to that date the Board had considered such items as tangible personal property for sales and use tax purposes. In this case the Board contended that plaintiff provided labor for the fabrication of tangible personal property and that charges for this labor were subject to sales tax. The court overruled the Board, holding that plaintiff was a construction contractor constructing structures on land, and the structures, because of their relatively permanent nature, constituted realty rather than tangible personal property. A. S. Schulman Electrical Co. v. State Board of Equalization (1975) 49 Cal.App.3d 180.