Was placing reinforcing steel into horizontal tilt-up wall forms taxable fabrication?

Plain-English summary

On the limited facts then presented, placing reinforcing steel into horizontal forms before the prime contractor poured and tilted the concrete wall panels was taxable fabrication. The panels had not reached their final resting place, so the steel supplier was not yet installing steel in a completed wall.

The memorandum therefore treated the steel supplier's entire charges as subject to sales tax.

This was not the final published treatment of the fuller construction sequence. Annotation 190.0700 later explained that the 1965 opinion rested on incomplete facts. When the steel contractor's work continued after the panels were tilted into place through column-steel installation, wiring, and welding, the later opinion treated it as a construction contractor consuming materials.

Common questions

Why was the 1965 work called fabrication?

The steel was placed while the slabs were still horizontal and before their final placement as walls.

Were the steel supplier's charges taxable under this source?

Yes, on the limited facts described.

Did a later official opinion change the analysis?

Yes. Annotation 190.0700 used the fuller post-placement work sequence and reached contractor-consumer treatment.

Citations and references

• Annotation 190.0700 — later official letter identifying this opinion's factual account as incomplete and applying the fuller sequence
• August 19, 1965 district request letter — identified as the inquiry answered; not reproduced in the official PDF

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/190-0720.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

San Jose – Dist. Prin. Aud

From:

Tax Counsel (GAT)

190.0720

Date:

August 30, 1965

This is in reply to your letter of August 19.
It is our understanding that taxpayer has a contract to supply reinforcing steel used in the construction of concrete buildings in the following manner: The building contractor constructs forms for concrete-slab walls at the jobsite. The forms are in a horizontal position. The taxpayer places reinforcing steel in the forms and the prime contractor pours concrete into the form, covering the reinforcing steel. When the concrete is hardened, the prime contractor removes the forms and sets the slab in a vertical position in its final resting place. Inasmuch as the concrete slabs are not in their final resting place when taxpayer places the reinforcing steel, it is our opinion that he is not installing steel in the construction of a wall but, rather, is fabricating a concrete slab. Accordingly, his entire charges are subject to sales tax.

GAT:o’b

[1b]