Did separate purchase orders for girders and erection create two tax transactions?

Plain-English summary

Two separate documents—one for furnishing 64 prestressed concrete girders and another for erecting them—were treated as a single construction contract.

Both documents had the same date and covered the same property. The split occurred only because the prime contractor had inadvertently failed to identify the supplier during bidding, requiring separate orders for furnishing and erection.

The number of documents did not override the substance and intent of the combined arrangement.

Common questions

Did two documents automatically create a retail sale plus a service contract?

No.

What facts showed one construction contract?

The same date, the same girders, and the documented bidding reason for using separate orders.

Citations and references

• Former Sales and Use Tax Ruling 11 — construction-contract treatment applied and identified as enclosed; the separate copy is not reproduced in the official PDF
• November 19, 1964 request letter and its enclosed furnishing and erection documents — identified as reviewed; the separate materials are 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/190-0860.pdf

Original ruling text

190.0860

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

November 20, 1964

D--- P--- C---, Inc.
P.O. Box XXXX
--- XX, California
Attention:

Mr. J. C. N--President

SC-K-XXXXX

Gentlemen:
Upon reviewing your letter of November 19, 1964 and its enclosures, it appears clear that although two separate documents are involved, one being a contract for the furnishing of 64 Prestressed Concrete Girders by you, and the other for the erection of said girders, the two documents should be treated as a single construction contract for purposes of application of sales and use taxes under ruling 11, copy enclosed. Each contract bears the same date and refers to the same property. You have explained the reason for the two separate orders as being an inadvertent failure of the prime contractor to list your name at the time of the bid, which necessitated a separate contract for the furnishing and erection of these girders. It is our opinion that they may be treated as a single contract and tax liability determined accordingly. Very truly yours,

E. H. Stetson
Tax Counsel

EHS:md
Enclosure

cc:

Sacramento – District Administrator