Did factory-built buildings installed for church schools qualify for section 6012.6's special tax treatment?

Plain-English summary

The memorandum records the Board staff's conclusion that church schools were not included under the then-recent amendments governing factory-built school buildings. A factory-built building installed on a church-school site therefore did not receive section 6012.6's special treatment under which tax was measured on 40% of the selling price.

The official annotation explains the boundary: the building had to be installed on a site owned or leased by a school district or community college district. This memorandum does not decide the separate onsite-assembly question it mentions.

Common questions

Did a church school's educational use qualify by itself?

No. The staff conclusion excluded church schools from the special rule.

What tax benefit was at issue?

The memorandum describes a special measure based on 40% of the selling price.

Did the memorandum resolve onsite assembly before attachment?

No. It says that question arose and went unanswered.

Citations and references

• California Revenue and Taxation Code section 6012.6 — factory-built school-building rule identified by the official annotation
• Assembly Bill 4029, 1990 California Statutes chapter 763 — recent amendment discussed by the memorandum

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/190-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/190-0252.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Mr. Glenn Bystrom

From:

Donald J. Hennessy
Senior Tax Counsel

Subject:

Relocatable Classrooms

190.0252
Date

November 16, 1990

All were sorry you missed the meeting of November 7, 1990 with representatives of the relocatable classroom industry. One question which arose at such meeting concerns your October 26, 1990 letter (copy enclosed) to T--- S---, the Controller of M--- R---. On page 2, of such letter, in the first sentence of the third paragraph you stated, “If you acquire a school building and have a contract to either sell or lease it to a school district at the time of purchase, you must not issue a resale certificate for this purchase.” It was suggested at the meeting that the words “either sell or” should be deleted, so that the sentence would only apply to school buildings acquired for leasing. We could think of no other reason why a school building specifically purchased for resale could not be purchased on a resale certificate. Would you clarify this sentence in another letter to Mr. S--- with copies to Gary Jugum, Ray Hirsig, Bob Sullivan, and myself. Another problem which arose at the meeting, and which went unanswered, involved the onsite assembly of a relocatable classroom prior to actual attachment (installation) of the classroom to the realty. All of us thought we have covered this in previous meetings, but could not locate an answer. Possibly this should be discussed and our conclusions communicated to the industry representatives who participated. Two conclusions worthy of note mentioned at the meeting were (1) church schools are not included even under the most recent amendments and (2) community colleges sometimes do not go through the process as required in AB 4029; if they do not, they will not get the benefit of the 40% rule.

DJH:es
3643I
Enc.
cc:
Mr. Gary J. Jugum
Mr. Bob Sullivan
Mr. Ray Hirsig