Was rebuilding and enlarging a pleasure-boat cabin taxable fabrication of a new vessel?

Plain-English summary

California treated the complete rebuilding of a pleasure boat's cabin as repair or reconditioning, not fabrication of a new vessel, because the completed boat remained a pleasure boat.

The larger cabin and added sleeping facilities did not make the project a conversion into a new and different vessel. Tax therefore applied only to the selling price of the parts and materials used in the repair.

Common questions

Was the cabin rebuild taxable fabrication?

No.

Did enlarging the cabin change the result?

No, because the boat remained a pleasure boat.

What was taxable?

The selling price of the repair parts and materials.

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/315-0720.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Mr. H. P. Kerrican (JPG)

From:

R. G Hamlin

Subject:

Rebuilding of Cabin on Pleasure Boat

315.0720

Date:

February 2, 1951

In your memorandum of January 25 you ask whether a complete rebuilding of a cabin on a pleasure boat constitutes a fabrication of tangible personal property. It is our opinion that the rebuilding of a cabin on a pleasure boat constitutes a repair or reconditioning operation, if the boat remains a pleasure boat following the completion of the operation. The fact that the rebuilt cabin is larger and that sleeping facilities have been added does not, in our opinion, constitute the work a conversion of the boat so that it may be said to be the fabrication of a new and different vessel. Therefore, the tax will apply only to the sales price of the parts and materials used in repairing the boat.

RGH; HB

STATE BOARD OF EQUALIZATION
OFFICE CORRESPONDENCE
Place: Santa Rose
Date: January 25, 1951
To:

E. H. Stetson

From: H. P. Kerrigan (JPG)

Re:

Rebuilting of Cabin on Pleasure Boat

Would a complete rebuilding of a cabin on a pleasure boat be subject to tax on fabrication? The original cabin was small and had no facilities for sleeping, etc. The new cabin is quite large and contains berths, cooking facilities and lounge. It is not exactly for the use for which it was originally produced, but taxability is subject to question.

JPG:mf