Who consumed window materials when the prime contractor supplied them and paid a subcontractor only for installation work?

Plain-English summary

The prime contractor was the consumer of the window sash even though an independent subcontractor performed part of the installation.

The prime did not sell the sash to the subcontractor. It supplied the sash and wooden surrounds, remained responsible to the customer for the entire installation, and paid the subcontractor a flat price only to fit and nail the components into the opening.

Common questions

Did the installing subcontractor become the material consumer?

No, not on these facts.

Did the subcontractor buy the sash?

No.

What fact supported the prime contractor's consumer status?

It furnished the materials and remained responsible to the customer for the complete work.

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/190-0980.pdf

Original ruling text

190.0980

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

October 24, 1952

--- --- ----- --- ----- --- --Gentlemen:
Re: --Your inquiry concerns the application of the sales tax where the subcontractor is furnishing part of the “materials” by the general contractor in improving real property. As we understand the facts, your client contracts with the consumer to deliver steel or aluminum sash, including wooden “surrounds”, place it in window openings, and glaze the sash. Your client contracts with a subcontractor who fits the sash into the “surrounds”. The surrounds and sash are nailed into the window opening by the subcontractor and the glazing is done at the site by your client. The subcontractor does not purchase the sash from your client but is merely compensated at a flat price for his work. As your client does not sell the sash to the subcontractor, and is responsible to the customer for the entire installation, it is our opinion that he may properly be regarded as the consumer of the sash. We feel that, under this set of facts the party actually responsible for the work to the customer should be regarded as the consumer of “materials” furnished by him, even though the installation is performed by an independent contractor. Very truly yours,

W. W. Mangels
Assistant Counsel

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