Were mail chutes fixtures, and could a supplier accept resale certificates from contractor-retailers?

Plain-English summary

Mail chutes were fixtures under former Board Ruling 11. Their later attachment to real property did not make the supplier's retail sale exempt from sales or use tax.

Because contractors were treated as fixture retailers, the supplier could accept prescribed resale certificates from contractors holding seller's permits. Contractors could instead buy the chutes tax-paid, in which case the out-of-state supplier needed to register to collect use tax.

Common questions

Did attachment to realty exempt a retail mail-chute sale?

No.

Could a contractor buy a mail chute for resale?

Yes, with the seller's-permit and resale-certificate facts stated in the letter.

Could the contractor buy it tax-paid instead?

Yes.

Citations and references

• Former California Sales and Use Tax Ruling 11 — tax on retail property later attached to realty, mail chutes as fixtures, and contractors as fixture retailers applied; a copy was identified as enclosed but is not reproduced in the official PDF
• Former California Sales and Use Tax Ruling 68 — prescribed resale-certificate form cited; a copy was identified as enclosed but is not reproduced in the official PDF
• July 13, 1951 requester letter — taxability of California mail-chute sales when the chutes became part of real property identified as the inquiry answered; not reproduced in the official PDF
• Application for a certificate of authority to collect use tax — earlier applications forwarded with prior letters and a new application enclosed with this response identified; 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/190-1900.pdf

Original ruling text

190.1900

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

September 4, 1951

C--- M--- C--- Corporation
XX --- Avenue
--- X, New York

Account -- - XXX

Gentlemen:
This is in answer to your letter of July 13 in which you ask whether your sales of mail chutes to purchasers in this State are subject to sales or use tax in view of the fact that they become a part of the real property to which they are attached. As indicated by Sales and Use Tax Ruling 11, copy enclosed, either the sales or use tax applies with respect to retail sales of tangible personal property regardless of the fact that it is to be subsequently attached to and become a part of the realty. Accordingly, your sales of mail chutes at retail are not exempt from the tax. Contractors are regarded as retailers of fixtures, as defined by said Ruling 11. As we regard mail chutes as “fixtures” it appears that your sales to contractors holding a seller’s permit constitute sales for resale for which resale certificates in the form prescribed by Ruling 68, copy enclosed, may be accepted. Many construction contractors appear to prefer buying “fixtures” on a “tax-paid” basis, to avoid the necessity of paying the tax directly to the State. To enable you to sell your mail chutes on a tax-paid basis you will, of course, be required to register with this Board. You may do so by submitting a completed application for a certificate of authority to collect the use tax. Although we have forwarded applications with our previous letters for your convenience we are enclosing a new application herewith. Very truly yours,

R. G. Hamlin
Tax Counsel

RGH:ja
cc:

Mr. F--- T. L---