Were separately stated charges to tune, test, and adjust a completed organ during installation taxable?

Plain-English summary

The organs were completely manufactured, assembled, and tested at the factory before shipment. California treated the later tuning, testing, and adjustment needed to adapt each organ's tone to the acoustics of its building as installation labor.

When those charges and the other installation-labor charges were segregated from the organ's sales price, tax did not apply to them.

Common questions

Was on-site tuning treated as further manufacturing?

No, under the source's completed-at-the-factory facts.

Why was the work performed at the building?

To fit the organ's tone to that building's acoustics.

Did the charges have to be segregated?

Yes.

Citations and references

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

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/315-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/315-0340.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

315.0340
September 21, 1950

To:

V. Ekstrom

From:

R. G. Hamlin

Subject:

A--- G. K--XXXX West --- Boulevard

-- XXXXXX

We have reviewed the field audit report and correspondence in connection with our proposed determination against the above taxpayer, with particular reference to the application of tax to that portion of the installation charges of organs attributable to testing, tuning, and adjusting of the organ during its installation. It is our opinion that the charges for labor of tuning, testing, and adjusting of organs for the purpose of adapting the tone to the particular acoustics of the building in which the organ is installed is a part of the charge for installation. Accordingly, if such charges, together with other charges for labor of installation, are segregated from the sales price of the organ, the tax will not apply. In this connection it is noted that our auditor’s supplemental comments, dated July 21, indicate that the organs are completely manufactured, assembled, and tested at the factory before shipment and that the tuning, testing, and adjustment with respect to these organs at the time of installation is to fit them to the acoustics of the buildings in which they are installed.

RGH:HB