Ezel / Tax Rulings / CA

Were charges to string wires and make connections on an existing utility line taxable fabrication?

Short answer No. The line was already erected and in use, so the work was installation; tax applied only to the selling price of materials furnished.
State
CA
Ruling
Annotation 315.0260
Tax type
Sales and Use Tax
Issued
1957-06-18
Issued by
California State Board of Equalization
Requested by
A contractor petitioning over work on existing utility pole lines
Topics
installation materials fabrication
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1957. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1957
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This 1957 internal memorandum concerned an already erected, operating utility line and distinguished the work from a contract to furnish and erect an entire transmission or distribution line. New-line construction, different ownership, additional fabrication, materials, fixtures, or real-property terms could change the result. Current utility, construction, installation, fabrication, and material rules control today.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

A contractor strung wire, made connections, installed apparatus, and added guy wires to an existing utility line that was already erected and in use.

California treated those charges as nontaxable installation rather than fabrication of the entire line. Tax applied only to the selling price of materials the contractor furnished.

The source expressly distinguished this work from contracts to furnish and erect a complete transmission or distribution line.

Common questions

Was stringing wire on the existing line taxable labor?

No.

What remained taxable?

The selling price of furnished materials.

Would the same answer apply to building a new line?

The opinion did not say so; it distinguished new-line construction.

Citations and references

The supporting memorandum does not cite a specific statute or regulation.

Source

Original ruling text

State of California

Board of Equalization

Memorandum

To:

From:

E. H. Stetson

Subject:

315.0260

Date:

June 18, 1957

Following review of the agreement submitted by petitioner at the hearing before the Board, it is our conclusion that the charges made by petitioner under its contract with Pacific --- System are taxable only to the extent of the selling price of materials furnished. The charge for the stringing of the wires on the utility lines and other installations such as making connections, installing apparatus and guy wires, etc., are nontaxable installation charges. This case differs from others in which contractors have contracted to furnish and erect transmission or distribution lines in that in this case the line was already erected and in use. Petitioner simple contracted to string wires on existing lines and therefore should not be regarded as fabricating the entire line. Will you please see that an appropriate adjustment is made and the matter presented to the Board for redetermination accordingly.

EHS:ds

What does the law say today, for your facts?

This ruling is from 1957. Ezel checks current California tax law against your situation and cites the authority it relies on.

Opens in Ezel Pro.

  • Checks the law as it stands today, not only this page
  • Cites every source it relies on, so you can verify it
  • Chat, drafting and research in one workspace