How did installation method affect whether mirrors were personal property, materials, or fixtures?

Plain-English summary

A mirror merely hung by wires from wall nails remained tangible personal property. Its sale for resale to the dealer could be exempt, the dealer's sale to the customer was taxable, and a lump-sum charge remained fully taxable when installation was not separately stated.

An integral mirrored wall or glass that became an inseparable part of the completed structure was material used to improve realty. The installing subcontractor was ordinarily the material consumer, subject to the letter's marked-up-billing qualification.

A framed mirror securely affixed by screws, retaining its identity as an accessory, could instead be a fixture. On the stated historical figures, the installer-to-dealer fixture sale price was $75.

Common questions

Was every installed mirror part of the realty?

No. A mirror hanging by wire from nails remained personal property.

When was a mirror treated as material?

When a mirrored wall or glass became integral and inseparable from the completed structure.

Could a mirror be a fixture?

Yes. The letter gave a framed mirror securely attached by screws as an example.

Citations and references

• Former California Sales and Use Tax Ruling 11, including its definitions of materials and fixtures and its section titled “Materials Used by Contractors” — construction-contractor treatment applied throughout the letter
• California Sales and Use Tax Regulation 1521(b)(2)A.2, as printed in a handwritten source note — contractor sale of materials cross-reference
• June 23 taxpayer letter concerning sales tax on mirror sales and installation — request answered and facts summarized; not reproduced in the official PDF
• Enclosed copy of former Sales and Use Tax Ruling 11 — identified as an enclosure; 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/190-1940.pdf

Original ruling text

190.1940

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

November 28, 1952

A--- P--- & Company
XXX North --- Boulevard
--- --- XX, California
Attention:

Account No. -- - XXXXX

Mr. A--- J. S---

Gentlemen:
This is in reply to your letter of June 23 concerning the application of sales tax to the sale and installation of mirrors. You state that in a typical transaction you charge your customer $120.00 for installed mirrors, charging sales tax reimbursement on the entire lump-sum. You then contract with a glass manufacturer for the manufacturer to do the actual installation. The manufacturer charges you $75.00 for material and $22.75 for labor, charging you sales tax reimbursement on the material price. The question presented is whether the manufacturer’s sale of the material to you is taxable or whether your sale of the installed mirror to your customer is taxable. The problem is to determine whether the mirror, when installed, is regarded as becoming part of the realty. A mirror which merely hangs on a wall by wires attached to nails would not be regarded as becoming part of the realty. Accordingly, if the mirror or mirrors retained their status as personalty you are entirely correct in your view that their sale to you would be an exempt sale for resale of tangible personal property, with the sale by you to your customer constituting a taxable retail sale. While separately stated installation labor charges by you would be exempt, your entire lump-sum charge is taxable in the absence of separately stated installation charges. In the foregoing we have assumed that the mirrors retain their status as personalty. On the other hand, the application of the sales tax to construction contractors is governed by Sales and Use Tax Ruling 11 (copy enclosed). Where a mirrored wall is installed or where “glass” becomes an integral and inseparable part of the completed structure the “glass” or mirrored wall is regarded as “materials” under Ruling 11. Subcontractors are contractors within the meaning of that ruling. Accordingly, if the T--- G--- Company was furnishing and installing “materials” as defined therein, in improving realty in performing their sub-contract, sales tax reimbursement need not be charged by you to your customer inasmuch as you are not regarded as selling tangible personal property. If “materials” were involved the T--- G--- Company would normally be regarded as the consumer thereof. In the present instance, however, assuming that “materials” were involved, the second paragraph of that section of Ruling 11 entitled “Materials Used by Contractors” would apparently govern so that the “tax” charged to you would not be improper. Only if contractor was “selling” the materials (1521(b)(2)A.2.) DHL.

A--- P--- & Company

-2-

November 28, 1952
190.1940

It is also possible that the mirrors involved are “fixtures” as defined in Ruling 11. Such would apparently be the case if they are frame mirrors securely affixed to the building by screws which have not lost their identity as accessories when placed or installed. If the mirrors involved are “fixtures” the last retail sale would be made by T--- G--- to you, with the sale price being properly regarded as $75.00 If you have any further questions relating to this transaction, please furnish us with complete information as to the type of mirror, manner of installation, and other pertinent details. We are sorry that we mislaid your letter and did not answer it until this time. Very truly yours,

W. W. Mangels
Assistant Counsel

NBH:WWM:ja
cc:

Santa Monica – Auditing