When was elevator assembly taxable fabrication rather than nontaxable installation?

Plain-English summary

Assembling an elevator separately from installing it was a production, fabrication, or processing step. The charge for that assembly for a consumer was taxable under former Ruling 15.

When assembly and installation were indivisible because the fixture did not exist as a unit until its parts were attached to the realty, the component parts were the property sold. The charge for installing those parts into the building was not taxable even though installation also completed the assembly.

The source's 1989 note says Regulation 1521(c)(6) now covers elevator installations.

Common questions

Was separate elevator assembly taxable?

Yes, under the historical rule.

What if the elevator only came into existence through onsite attachment?

Then the indivisible work was treated as installation of the component parts.

Citations and references

• Former Board Ruling 15 — fabrication and processing rule applied in the memorandum
• Cal. Code Regs. tit. 18, § 1521(c)(6) — current elevator-installation provision identified by the source's 1989 note

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/190-0280.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Mr. H. C. Motley (FCP)

From:

R. G. Hamlin

Subject:

--Elevator Maintenance

190.0280

May 2, 1950

You have inquired whether the labor in the assembling of an elevator is taxable under Ruling 15. You are advised that we regard the assembling of an elevator as distinguished from its installation, as a step in the production, fabrication, or processing of tangible personal property within the meaning of Ruling 15. Therefore, the tax will apply to the charge for assembling an elevator for a consumer. Where the assembling of the component parts of a fixture and the installation thereof constitute an indivisible operation, that is, where the fixture does not exist as a unit until its component parts are attached to the realty, we would regard the component parts of the fixture as the property sold. In this event, the tax would not apply to the charge for installing the component parts of the fixture into the building, even though the installation constitutes, in part, the assembly of the completed fixture.

RGH:hb

8/8/89 Regulation 1521(c)(6) now covers elevator installations.

DJH.