Were pressure-fit demountable wall panels materials, fixtures, or personal property?

Plain-English summary

Wall panels held in place only by internally generated pressure against the floor and ceiling were tangible personal property. They were neither materials nor fixtures because Regulation 1521 required both categories to be affixed to realty.

Pressure alone did not satisfy the Civil Code section 660 affixation standard. By contrast, otherwise similar panels inserted into splines permanently installed in the ceiling had sufficient attachment to be classified as materials.

Common questions

Were pressure-fit panels fixtures?

No. They were tangible personal property.

Could pressure against the floor and ceiling count as affixation?

Not under the facts described in the memorandum.

Why were the earlier panels treated as materials?

They used splines permanently installed in the ceiling.

Citations and references

• California Sales and Use Tax Regulation 1521 — requirement that materials and fixtures be affixed to realty applied
• California Civil Code section 660 — definition of property affixed to land quoted and applied
• November 29, 1966 Tax Counsel opinion, California Tax Service Annotation 190.0020 — lack of affixation means property is neither materials nor fixtures cited
• December 12, 1968 Tax Counsel opinion concerning similar panels inserted into permanently installed ceiling splines — materials classification distinguished; no ruling number or separate opinion is reproduced in the official PDF
• July 18, 1974 Orange County Auditing memorandum — requested classification of the current demountable panels; facts summarized and answered, but the memorandum is not reproduced in the official PDF
• Consultation with Mr. T. P. Putnam — addressed whether pressure against the floor and ceiling constituted affixation; no separate record is 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/190-1978.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Orange County Auditing

From:

Tax Counsel (TLH) – Headquarters

Subject:

S--- Inc.
XXXX South --- Street
---, CA XXXXX

190.1978
Date:

August 27, 1974

SR -- XX XXXXXX

Your memorandum of July 18, 1974, asked our opinion on the classification of “demountable wall panels” as fixtures or materials under Regulation 1521. You referred to an opinion of Tax Counsel, December 12, 1968, that similar panels were materials. The panels in the 1968 opinion were held in place by internally generated pressure on the floor after insertion and pressing into splines permanently installed in the ceiling. The panels in your current inquiry are held in place by internally generated pressure on both floor and ceiling, i.e., there are no splines in the ceiling.

It is our view that common to both materials and fixtures under the regulation is the requirement that they be affixed to the realty. Thus, if an item is not so affixed it is neither materials or fixtures but tangible personal property. See opinion of Tax Counsel, November 29, 1966, Ca. Tax. Serv. Anno. 190.0020. Civil Code Section 660 defines what is affixed to land by stating a thing is deemed affixed when attached by roots, etc.; imbedded in it, as in the case of walls; or permanently resting on it, as in the case of buildings; or permanently attached to that which is permanent, as by means of cement, plaster, nails, bolts, or screws. In applying the above to the panels in your current inquiry, it is our opinion, following consultation with Mr. T. P. Putnam, that the mere exertion of internally generated pressure on floor and ceiling does not constitute affixation, thus these panels are tangible personal property. The permanently affixed splines used in the installation of the panels in the 1968 opinion provides sufficient affixation to allow those panels to be considered materials.

Mr. J. J. Kontilis
TLH:ph

190.1978.doc

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January 12, 1990