Which charges were taxable when a business fabricated and installed a replacement covering on an automobile top?

Plain-English summary

California treated re-covering an automobile top as repair. The taxable property was the replacement covering in the form in which it was ready to be installed, so its selling price included sewing, cutting, and other labor used to fabricate the cloth or other material before installation.

The labor of applying that fabricated covering to the old bows or otherwise installing it on the automobile was not taxable.

Common questions

Was re-covering an automobile top treated as repair?

Yes.

Was sewing or cutting the replacement material taxable?

Yes. That labor was part of fabricating the taxable replacement covering.

Was installation labor taxable?

No.

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/315-0440.pdf

Original ruling text

State of California

Memorandum

To:

Mr. John B. Evans

From:

E. H. Stetson

Subject:

Re-covering Automobile Tops

Board of Equalization

315.0440
Sacramento
May 29, 1951

In our opinion the work of re-covering an automobile top is a repair operation in which the tax applies to the retail selling price of the materials applied to the old top. The selling price of the materials thus applied would, of course, be inclusive of any labor of sewing, cutting, etc., done upon the cloth or other material used prior to the actual application of the material to the old bows or otherwise installed. Basically there does not appear to be any difference between the re-covering of an automobile top and the re-covering or reupholstering of furniture. That portion of the charge not taxable is that which represents the labor of installing the cloth or other material, but does not include the labor of fabricating that material into the particular form or condition in which it is applied to the customer’s property. It is my recollection from the discussion with Mr. J--- J--- that he is entirely in agreement with our views as to the application of the tax.

EHS:ph