Laws, Regulations and Annotations

Search

Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations


A    B    C    D    E    F    G    H    I    J    L    M    N    O    P    R    S    T    U    V    W    X   


C


190.0000 Construction Contractors—Regulation 1521

Annotation 190.2435

(c) Measure of Tax

190.2435 Contract Modification—Passage of Title. A construction contractor enters into a contract to construct improvements to realty in California and to furnish machinery and equipment. The construction contractor is required to install the machinery and equipment. Title is specified to pass on delivery to the job site. After delivery of some of the machinery and equipment, the parties negotiate a modification to the contract, one result of which would be to reduce the tax applicable to the transaction by having title pass before delivery. This would eliminate transportation charges from the amount subject to tax.

Even though parties may change their rights and obligations as between themselves, a change in an existing contract cannot change the rights of the state which vested when title passed. The negotiated modification cannot re-vest title in the seller so as to change the amount of tax due with respect to items, title to which has already passed to the buyer. 3/29/67.