Were construction materials bought for real-property improvements on San Nicolas Island exempt because of the island's location or federal use?

Plain-English summary

California considered materials bought by construction contractors for improvements to real property on San Nicolas Island.

The opinion cited the California Constitution's inclusion of coastal islands and Government Code section 23156's inclusion of the island within Ventura County. It therefore treated San Nicolas Island as within California and subject to state jurisdiction, except to the extent that state jurisdiction conflicted with the United States' governmental use of the island.

California concluded that the Sales and Use Tax Law fully applied on that basis and that construction-material purchases were not exempt under section 6386.

What this means for you

Construction contractors and tax professionals

Treat the island as an in-state job location unless a specific federal-jurisdiction conflict or current exemption applies. Analyze the contractor's material purchases under the ordinary construction rules.

Common questions

Q: Was San Nicolas Island treated as outside California?

A: No. The opinion placed it within California and Ventura County.

Q: Did federal governmental use eliminate all California jurisdiction?

A: No. The opinion recognized a limit only where California jurisdiction conflicted with federal governmental purposes.

Q: Were the contractor's material purchases exempt under section 6386?

A: No.

Citations and references

• Former California Constitution article XXI
• California Government Code § 23156
• California Revenue and Taxation Code § 6386

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 530.0220
• Original supporting opinion: 530.0220 PDF

Original ruling text

530.0220

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
Sacramento
July 22, 1957
San Jose – Tax Administrators (SE)
Headquarters – Sales Tax Counsel (JJD)

This is in reply to your letter of June 26 concerning the application of the tax to purchases of materials by construction contractors who are to use said materials for the construction of improvements to real property on San Nicholas Island. Article 21 of the California Constitution describes the boundary of California as including “all the islands, harbors, and bays along and adjacent to the coast.” Section 23156 of the Government Code describes the boundaries of Ventura County as including “the islands of Anacapa and San Nicholas”. Accordingly, it is our opinion that San Nicholas Island is in the State of California and subject to the jurisdiction thereof except to the extent that such jurisdiction is in conflict with the jurisdiction of the United States in carrying out its governmental purposes in the use of San Nicholas Island. It is therefore our opinion that the California Sales and Use Tax Law is full applicable and that the purchase of materials for construction use on the island would not be exempt under Section 6386 of the Sales and Use Tax Law.

J. J. Delaney