Were custom classroom blackout curtains fixtures or ordinary personal-property draperies?

Plain-English summary

Specialized darkening curtains installed in school classrooms for audiovisual use were fixtures, not ordinary household draperies.

The curtains were fire-resistant and could not be removed for cleaning without damaging that protection. They were custom-made for different window shapes and sizes, expected to last for years, and attached to tracks recessed in or screwed to ceilings. Some were permanently sewn to roller flanges; others used hooks.

The parties intended the curtains to become integral parts of the school buildings. Similar school room dividers using comparable hardware were also fixtures.

Counsel said the taxpayers had correctly reported tax on fixture cost under the lump-sum contracts and would recommend that the Board delete the proposed $14,622 markup on drapery sales. The letter does not record Board action.

Common questions

Why were these different from household curtains?

They were custom, fire-resistant, long-lived, building-integrated classroom equipment.

Did using hooks instead of permanent sewing prevent fixture status?

No. The overall attachment and intended integration controlled.

How were comparable school room dividers treated?

As fixtures.

What happened to the audit markup?

Counsel recommended deleting it because tax had been correctly reported on fixture cost. The letter does not report whether the Board accepted that recommendation.

Citations and references

• Former California Sales and Use Tax Ruling 11 — fixture and lump-sum contractor cost-price treatment applied
• Petition for redetermination and May 14, 1965 preliminary-hearing record — proceeding and room-divider evidence identified; not reproduced in the official PDF
• Field audit report Item B and prior auditor advice — $14,622 drapery markup assessment and fixture-cost reporting advice described; underlying report and advice 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/190-1440.pdf

Original ruling text

190.1440

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

June 3, 1965

--- --- ----- --- -----, -- XXXXX
Gentlemen:
Following the preliminary hearing held on May 14, 1965, we have considered the petition for redetermination of sales and use tax filed on behalf of the above taxpayers. We have concluded that the darkening curtains or draperies installed in school classrooms for audio-visual purposes constituted “fixtures” within the meaning of Ruling 11. Accordingly, taxpayers correctly reported tax measured by the cost price of the fixtures used in performing lump-sum contracts and any advice given by our auditors to that effect would have been correct. Our understanding of the facts is that the darkening curtains are fire resistant and could not be taken down and cleaned without ruining their fireproof character; that they were customized to fit windows of various sizes and shapes and, therefore, were not moved from one room to another; that the curtains were relatively high quality and expected to last many years; that sometimes the tracks were recessed in the ceiling while other times they would be attached to the surface of the ceiling with screws; that at times the curtains would be permanently sewed to the flanges extended from the rollers while at other times they would be attached to the rollers with hooks. In addition, we believe the darkening curtains were intended to become an integral part of the school building and, hence, real property. In this regard, we find them distinguishable from the typical draperies installed in homes. We believe that room dividers installed in schools, such as those brought to the preliminary hearing, also would constitute fixtures since the hardware used in installation is very similar to that of the darkening curtains. In accordance with our above conclusions, we shall recommend to the Board that the measure of
$14,622 set up under item B of the report of field audit as “markup on drapery sales omitted” be deleted from the measure of tax. Very truly yours,

Robert J. Brenner
Associate Tax Counsel
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