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Business Taxes Law Guide—Revision 2024
Sales And Use Tax Court Decisions
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Western Concrete Structures, Inc. v. State Board of Equalization … (1977)
Contractor Is Consumer of Materials when He Is Contractually Responsible and Provides All Supervision in Installation
Plaintiff entered into lump-sum contracts under which it furnished shop drawings, post-tensioning tendons, rental of stressing equipment, and field supervision. Under some of the contracts, plaintiff supervised the post-tensioning work which was performed by the general contractor or a subcontractor of the general contractor. Under other contracts, the post-tensioning work was done by plaintiff or a subcontractor of plaintiff. In either case plaintiff was responsible for its work, materials, and equipment. Where the post-tensioning work was performed directly by plaintiff or a subcontractor of plaintiff, it was agreed that under Regulation 1521, regarding construction contractors, plaintiff was the consumer of the materials used. Where the post-tensioning work was done under plaintiff's supervision by the general contractor or a subcontractor, the Board contended that plaintiff was the retailer of goods to the general contractor, and asserted sales tax. Plaintiff paid the tax and sued for refund.
The court of appeal upheld the trial court in granting the refund to the plaintiff. The court based its decision on what it found to be the scope of plaintiff's responsibilities under the contracts, which included all supervision and testing, the making of necessary corrections when there was a failure, and the fact that all employees involved, regardless of employer, labored under the expert direction of plaintiff's representative. Western Concrete Structures, Inc. v. State Board of Equalization (1977) 66 Cal.App.3d 543.