Was a temporary county-fair exhibit an improvement to realty, and which labor charges were excluded?

Plain-English summary

The temporary fair exhibit was not an improvement to realty. Because title to all tangible personal property passed to the customer, the transaction was a taxable sale.

The sales price was the seller's full charge less separately stated actual installation. Design, construction, and assembly were not deductible, because assembly was distinguished from installation.

Common questions

Was the exhibit a construction improvement?

No.

Were assembly charges excluded from taxable gross receipts?

No.

What charge could be excluded?

Separately stated actual installation.

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/190-1060.pdf

Original ruling text

STATE BOARD OF EQUALIZATION
OFFICE CORRESPONDENCE

190.1060
Sacramento
April 17, 1950

To:

Mr. Wm. R. Thomson (PER)

From:

R. G. Hamlin

Re:

I--- A---, Inc.
XXXX --- ----- XX, Calif

You have inquired concerning the application of the tax to the design, assembly, and installation of an exhibit at the Los Angeles County Fair by the above firm for the W--- C---. From the information contained in the taxpayer’s letter to your office of October 26, a copy of which was attached to your memorandum, and the photographs of the exhibit, also attached to your memorandum, it is our conclusion that the exhibit does not constitute an improvement to realty. Inasmuch as your memorandum states that title to all of the tangible personal property furnished by the taxpayer passes to the W--- C---, we are of the opinion that the transaction constitutes a taxable sale of tangible personal property and that the sales price thereof is the full amount of the charge by this company to the W--- C---, less separately stated charges for installation. In this respect it is to be noted that charges for assembling the property are to be distinguished from charges for its installation. Only charges for actual installation may be deducted from the gross receipts subject to the tax. We are returning the photographs herewith.

RGH:HB