Ezel / Tax Rulings / CA

Were tanks of at least 500 barrels erected onsite improvements to realty?

Short answer Yes. Large tanks assembled at the jobsite from prefabricated parts were real-property improvements, and the erector consumed the materials rather than retailing completed tanks.
State
CA
Ruling
Annotation 190.1040
Tax type
Sales and Use Tax
Issued
1959-01-22
Issued by
California State Board of Equalization
Requested by
E--- S--- S--- and L---
Topics
storage tanks real property improvements materials reaudit
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1959. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1959
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This January 22, 1959 Associate Tax Counsel letter concerns tanks with capacities of 500 barrels or more erected at the jobsite from prefabricated parts. The conclusion supported a reaudit and depended on tank size and onsite erection. Smaller, factory-completed, movable, or differently installed tanks require their own current-law classification.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Tanks with capacities of 500 barrels or more, erected at the jobsite from prefabricated parts, were improvements to realty.

The erectors were consumers of the materials used rather than retailers of completed tanks. Tax Counsel directed the district to prepare a reaudit on that basis.

Common questions

What size threshold did the letter use?

500 barrels or larger.

Did factory-prefabricated parts make the completed tank personal property?

No, when the tank was erected at the jobsite under the described facts.

What procedural step followed?

A reaudit using contractor-consumer treatment.

Source

Original ruling text

190.1040

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

January 22, 1959

Mr. L--- B. H--Attorney at Law
XXXX --- --- Boulevard
--- --- X, California
Re:

E--- S--S--- and L--Account SC- -- -XXXXX

Dear Mr. H---:
We have reviewed the information presented in support of the petition for redetermination filed on behalf of the above taxpayer. We think the information indicates that the tanks with a 500 barrel capacity and larger which are erected at the job site from prefabricated parts should be considered as improvements to realty. Thus, S--- and L--- are to be treated as the consumers of the material used and not as the retailers of such tanks. We shall direct our --- --- office to prepare a reaudit on this basis. When we have received the reaudit report we shall again communicate with you. Very truly yours,

John H. Murray
Associate Tax Counsel

JHM:rg

cc:

--- --- – Auditing
Please prepare a reaudit in accordance with the above. This matter was discussed with Mr. Say and Mr. Stetson. They concur in the conclusion that tanks of 500 barrel and larger capacity which are erected at the job site should be considered as improvements to realty.

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