Which labor was taxable when replacement neon tubing was made for an existing sign, and which labor remained repair?

Plain-English summary

Forming replacement glass tubing, evacuating its air, and filling it with gas fabricated a repair part and was taxable rather than exempt repair labor.

Attaching electrical contacts required more facts. If the contacts completed the replacement tube, that labor was fabrication. If the work merely attached the completed tube to the existing sign, it was exempt repair labor.

Citations and references

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

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/435-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/435-0340.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

X-----------------------

From:

W. W. Mangels (NBH)

Subject:

X------------------------

435.0340

Date:

July 22, 1952

This is in reply to your memorandum of May 22 concerning the replacement of the neon tubing in an existing neon sign where the replacement is done to repair the sign rather than to create a new sign. It is our opinion that the labor of bonding the glass tubing, exhausting the air and filling with gas should be construed as fabrication labor, i.e., fabrication of repair parts, rather than as true repair labor. Without further information we are unable to render an opinion as to whether "attaching electrical contacts" is fabrication labor or repair labor. If that labor is necessary to complete a repair part, i.e., tubing, by annexing end parts thereto which are to be connected with the sign, it would appear to be fabrication labor. On the other hand, if that labor merely consists of attaching the tubing to the sign it would appear to be exempt labor of repair.

NBH:ja