Was a land surveyor's charge taxable when the surveyor measured a site, prepared a drawing from field work, and gave the client a copy?

Plain-English summary

A land surveyor visited a client's site, measured it with civil-engineering tools, prepared a drawing from the field work, and gave the client a copy.

California found that the client sought the land-surveying service. The drawing merely communicated the service result, so its incidental transfer did not make the survey charge subject to sales or use tax.

The opinion compared the result to a real-estate appraisal: a detailed written report does not become the true object when the client actually seeks the professional's stated value.

What this means for you

Land surveyors

A customary drawing documenting field work was incidental to the survey service under these facts.

Property owners and developers

The tax result depended on seeking measurement and professional analysis rather than buying an existing drawing.

Accountants and tax professionals

Review field work, professional judgment, what the client contracted to obtain, copy count, and whether drawings are separately sold.

Common questions

Q: Was the land-survey charge taxable?

A: No.

Q: Did giving the client a drawing make it taxable?

A: No. The drawing was incidental to the service.

Q: What controlled the result?

A: The contract's true object was the site survey, not the physical drawing.

Citations and references

• California Sales and Use Tax Regulation 1501

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 515.0494
• Original supporting opinion: 515.0494 PDF

Original ruling text

515.0494

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

WILLIAM M. BENNETT
First District, Kentfield

1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-2641

BRAD SHERMAN
Second District, Los Angeles
ERNEST J. DRONENBURG, JR.
Third District, San Diego
MATTHEW K. FONG
Fourth District, Los Angeles

November 23, 1992

GRAY DAVIS
Controller, Sacramento
────────
BURTON W. OLIVER
Executive Director

Mr. Q--- D--XX --- Drive
---, California XXXXX
Re: SR -- XX-XXXXXX
Dear Mr. D---:
You requested our opinion as to whether sales tax was due on charges made by you for conducting a land survey for your client. Sales or use tax is imposed on all charges related to the sale of tangible personal property except those charges specifically excludable from taxation by statute. Service providers are the consumers, not the retailers of tangible personal property. As you described a typical survey transaction, you are engaged to visit a site, measure it with common civil engineering tools, and then prepare a drawing based on your field work. You then provide your client with a copy of the drawing. Regulation 1501 discusses service enterprises generally (copy enclosed). Services are not normally subject to sales or use tax. The question often arises, however, as to the treatment of the transfer of tangible personal property which occurs incidentally with the service. If the service is the true object of the contract, there is no tax on the incidental transfer of personal property. If the tangible property is the true object, then a sales or use tax will be due on the total charge, without deduction for the service portion. As an example, when an appraiser is engaged to appraise a parcel of real estate, the true object sought is a stated value. The fact that reaching the stated value is accomplished by a detailed report showing how the appraiser reached his opinion does not make the appraisal report a taxable piece of tangible personal property. If the appraiser became famous, and anything with his signature was in demand by autograph collectors, then the sale of one of his appraisal reports would be taxable, unless exempt for some other reason.

Mr. Q--- D---

-2-

November 23, 1992
515.0494

It is our opinion that a typical land survey as you described is a service, and the drawing which is provided is an incidental transfer of tangible personal property and not subject to a sales or use tax. Sincerely yours,

Donald L. Fillman
Tax Counsel
DLF:wk
Enclosure - Reg. 1501