Was a 30-cent-per-ton barge unloading charge taxable when title to rock passed only after unloading?

Plain-English summary

A seller delivered rock by river barge for $1.70 per ton and charged another 30 cents per ton to unload it at the dock. Some of the rock was later self-consumed by the buyer.

There was no written contract, but the buyer's accountant said title did not pass until the rock had been unloaded. California therefore treated unloading like transportation performed before delivery.

Because unloading occurred before the sale and title passage, the 30-cent charge was included in the tax measure.

Common questions

Was unloading treated separately from transportation?

No. The opinion applied the same pre-delivery treatment.

Why was the charge taxable?

Title passed only after unloading was complete.

Was there a written title agreement?

No; the opinion relied on the buyer's accountant's statement.

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/557-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/557-0680.pdf

Original ruling text

STATE BOARD OF EQUALIZATION
OFFICE CORRESPONDENCE

557.0680
Place:
Date:

To:

Woodland – Auditing (WBM)

From:

Headquarters – Sales Tax Counsel (BH)

Re:

N--- C. B--D--- C--- Co.
P. O. Box XXX
--- ---, California

Sacramento, California
April 22, 1954

Account No. P-XXXX
Now SR --- XX-XXXXXX

This is in answer to your letter of March 16.
The H--- Company of --- --- sells rock to this taxpayer for resale. The rock is delivered by river barge to [California] and unloaded at the dock. The price is $1.70 per ton plus 30¢ per ton for unloading. There is no written contract between seller and buyer but the accountant for the above taxpayer states that the rock must be unloaded from the barges before title passes. Some of this rock has been self-consumed and the question arises whether the unloading charge of 30¢ per ton is included in the measure of tax. It is our opinion that the charge for unloading should be handled the same as a charge for transportation. Since the accountant has stated that title does not pass until after the rock is unloaded, the unloading occurs prior to the sale and the charge for unloading is taxable.

Bill Holden
BH:ja