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Business Taxes Law Guide—Revision 2024
Sales And Use Tax Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 1. Sales and Use Taxes
Chapter 1. General Provisions and Definitions
Section 6016.5
6016.5. Tangible personal property; exclusion. Notwithstanding any other provision of law, "tangible personal property," for purposes of this part, does not include telephone and telegraph lines, electrical transmission and distribution lines, and the poles, towers, or conduit by which they are supported or in which they are contained.
History—Added by Stats. 1965, p. 4488, in effect September 17, 1965. Section 3 of the act provides, "Section 2 of this act [6016.5] shall be for prospective application. The law as it existed prior to the effective date of Section 2 shall continue in full force and effect and as if Section 2 had not been enacted, as respects the application of sales and use taxes to sales of telephone and telegraph lines, electrical transmission and distribution lines, and the poles, towers, or conduit by which they are supported or in which they are contained, and as respects the application of sales and use taxes to tangible personal property sold or purchased and used in the performance of construction contracts for the construction of such lines, poles, towers or conduit, when the contract of salefor the lines, poles, tower or conduit or the contract for the construction thereof was validly entered into before the effective date of this act."
Electrical Power Transmission Lines.—A contract for the construction of an electrical power transmission line entered into before the effective date of section 6016.5 was a construction contract within the meaning established by ruling 11 (now regulation 1521). King v. State Board of Equalization (1972) 22 Cal.App.3d 1006; A.S. Schulman Electric Co. v. State Board of Equalization (1975) 49 Cal.App.3d 180.
Components.—This section does not extend to components, such as cable, purchased to be used in the construction or repair of transmission and distribution lines. Chula Vista Electric Co. v. State Board of Equalization (1975) 53 Cal.App.3d 445.
Components.—The tax exclusion in section 6016.5 applies only to fully installed and completed telephone and telegraph lines, and not to the pre-installation component parts of such lines. MCI Communications Services, Inc. v. California Department of Tax and Fee Administration (2018) 28 Cal.App.5th 635.
Film negatives and master recordings.—Film negatives and master recordings are tangible personal property for sales tax purposes even though valued in part for their intellectual content. Simplicity Pattern Co. Inc. v. State Board of Equalization (1980) 27 Cal.3d 900.