Ezel / Tax Rulings / CA

Was a retailer's separately stated charge taxable for bolting together factory-shipped steel shelving at the buyer's premises?

Short answer Yes. Bolting and assembling the knocked-down shelving were production steps, so the retailer's separately stated labor charge was subject to sales tax.
State
CA
Ruling
Annotation 435.0060
Tax type
Sales and Use Tax
Issued
1966-03-15
Issued by
California State Board of Equalization
Requested by
Public accountants asking about a retailer's separately stated charge for assembling steel shelving at a customer's premises
Topics
assembly labor fabrication labor direct shipment separately stated charges
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1966. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1966
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 is a California State Board of Equalization associate-tax-counsel letter dated March 15, 1966, published by CDTFA as support for a sales and use tax annotation. It addresses a direct-shipment sale of knocked-down shelving followed by the retailer's separately charged on-site assembly. Another taxpayer should not treat it as binding and should check current shelving, delivery, assembly, fabrication, separately-stated-charge, and sales-and-use-tax rules. This summary is informational only and is not legal or tax advice.
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 consumer ordered knocked-down steel shelving from a retailer, which arranged for the factory to ship the parts directly to the consumer. After delivery, the retailer bolted the parts together at the purchaser's premises for a separately stated labor charge.

The letter concluded that bolting and assembling the shelving were steps in a series of operations producing tangible personal property. The retailer's assembly charge was therefore subject to sales tax.

Citations and references

  • No numbered statute or regulation was cited in the source letter.

Source

Original ruling text

435.0060

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

March 15, 1966

W--- & R--Public Accountants
XXXX --- Tower
---, CA XXXXX
Attention:

Mr. G--- J. W---

Gentlemen:
This is in reply to your letter of February 22, 1966, regarding the application of sales tax with respect to certain charges for labor in the following circumstances: A consumer orders knocked-down steel shelving from a retailer. The retailer orders the shelving from the factory for direct shipment to the consumer. The shelving is delivered to the consumer. After arrival, the retailer, for a separately stated labor charge, bolts together and assembles the shelving at the purchaser’s premises. In response to your inquiry, it is our opinion that the bolting and assembling of the shelving constitutes steps in a series of operations resulting in the production of tangible personal property. Accordingly, the sales tax is applicable with respect to the retailer’s charges therefore. Very truly yours,

George A. Trigueros
Associate Tax Counsel

GAT:bn
cc:

--- – District Administrator

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