Did California sales tax apply to charges for lettering signs on new or used trucks and automobiles?

Plain-English summary

The December 4, 1950 letter answered an October 23 request about a general sign-painting business. Sales tax did not apply to charges for lettering signs on trucks or automobiles, whether the vehicles were new or used. The sign painter consumed the paint used for that work.

If material bought for resale was instead consumed in that work, former Ruling 68 required the cost price to be reported on line 2 of the painter's own sales-and-use-tax return as self-consumed merchandise.

Former Ruling 30 made repainting a customer's used sign and lettering used luggage nontaxable, with the painter consuming the materials. By contrast, former Rulings 21 and 30 made lettering new luggage taxable as finishing tangible personal property for a consumer.

Painting or lettering walls, windows, or signs attached to a building was nontaxable real-property work under former Ruling 25, and the painter consumed the material. Counsel generally treated mailboxes as attached realty unless particular facts showed otherwise, so lettering a mailbox in place was nontaxable whether it was new or used.

Source and live-annotation limits

The letter describes examples but supplies no customer, contract, vehicle, sign, luggage, building, mailbox, title, attachment, paint, invoice, charge, purchase, tax-return, or completed-transaction records. It says copies of former Rulings 68, 30, 21, and 15 were enclosed, but the PDF contains none. It references Ruling 25 without reproducing it.

The live annotation preserves only the nontaxable charge for lettering new or used trucks and automobiles. It omits the paint-consumer and self-consumption rules, used-sign and used-luggage work, taxable new-luggage branch, building and attached-sign work, conditional mailbox treatment, October 23 request, five historical rulings, missing enclosures, and absent transaction records.

What this means for you

Sign painters and tax professionals

Document whether the property is new or used, movable or attached to realty, what is painted or lettered, who owns the materials, whether paint came from resale inventory, and how charges and self-consumption are reported. The letter's rules are historical.

Common questions

Was lettering a new or used truck taxable?

No, under the historical letter.

Was lettering new luggage taxable?

Yes. Lettering used luggage was not.

Were in-place mailboxes treated as realty?

Generally yes, unless the particular facts showed otherwise.

Citations and references

• Former California Sales and Use Tax Rulings 15, 21, 25, 30, and 68
• October 23, 1950 request, sign-painting jobs, material purchases and withdrawals, tax return, and enclosed Rulings 15, 21, 30, and 68 — referenced or described but not included

Verbatim support

From the official December 4, 1950 letter:

As you have indicated, we do not regard the tax as applicable to your charges for lettering signs on [new or used] trucks and automobiles. Accordingly, you are the consumer of paint so used.

In general, we regard mailboxes as attached to realty, unless the facts of the particular case warrant a contrary conclusion.

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/345-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/345-0060.pdf

Original ruling text

345.0060

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

December 4, 1950
Dear Mr. L---:
This is in answer to your letter of October 23 with respect to the application of the State sales tax to your activities in the general sign-painting business. As you have indicated, we do not regard the tax as applicable to your charges for lettering signs on [new or used] trucks and automobiles. Accordingly, you are the consumer of paint so used. If the materials have been purchased by you for the purpose of resale, under Sales and Use Tax Ruling 68, copy enclosed, the cost price of such material should be reported on line 2 of your own sales and use tax return as self-consumed merchandise. Under Ruling 30, copy enclosed, the tax does not apply to charges for repainting or refinishing used articles. Therefore, the tax does not apply where a customer’s sign is repainted, or used luggage is lettered. Accordingly, you will also be regarded as the consumer of materials used in repainting or lettering in those instances. As indicated in Ruling 21, copy enclosed, the tax applies to charges for painting or otherwise finishing tangible personal property in connection with the production of a finished product for consumers, whether the article to be finished is supplied by the customer or by the finisher. Therefore, the tax applies to charges for lettering on new luggage. In general, the tax appears to apply only where the personal property painted or lettered is new, in conformity with Rulings 21 and 30. Rulings 21, 25, 30 are specific applications of the general rule stated in Ruling 15, copy enclosed. As stated in Ruling 25, the tax does not apply to your charges for painting or lettering on real estate. Accordingly, you will also be regarded as the consumer of materials used to paint signs on walls or windows of a building, or to paint signs attached thereto. In general, we regard mailboxes as attached to realty, unless the facts of the particular case warrant a contrary conclusion. As fixtures and attached property are treated as realty in the law, it is our opinion that the tax would not apply to charges for lettering mailboxes in place, whether the latter are new or used. Very truly yours,

R. G. Hamlin
Associate Tax Counsel
RGH:HB
Cc:

W. R. Thomson