Ezel / Tax Rulings / CA

Were purchases from the Public Housing Administration exempt, and how were buildings sold in place treated?

Short answer Purchases of tangible property were subject to use tax because the agency was incorporated, whether or not the property was surplus. A building kept at its existing leased site was treated as real property, but included equipment remained taxable.
State
CA
Ruling
Annotation 560.0120
Tax type
Sales and Use Tax
Issued
1956-01-24
Issued by
California State Board of Equalization
Requested by
Board auditing staff
Topics
equipment use tax
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1956. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1956
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 January 24, 1956 California State Board of Equalization legal memorandum published by CDTFA as support for a sales and use tax annotation. It classifies the former Public Housing Administration as an incorporated federal instrumentality and briefly distinguishes buildings retained in place under a lease from included equipment. 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

California classified the Public Housing Administration as an incorporated federal instrumentality. Purchases of its tangible personal property were therefore subject to use tax whether or not the property was surplus.

The memorandum treated a building sold in place differently when the buyer would use it at the existing location under a lease. That transaction was exempt as a sale of real property, but any equipment included in the transfer remained taxable.

What this means for you

Federal-property buyers and real-estate transaction advisers

Classify both the federal seller and each asset. Incorporated status prevented the general tangible-property exemption here, while a building remaining in place could be realty and equipment stayed personal property.

Common questions

Q: Did surplus status change the tangible-property result?

A: No.

Q: When was a building sale exempt?

A: When the buyer would use the building at its existing location under a lease.

Q: Was included equipment exempt too?

A: No.

Source

Original ruling text

State of California

Board of Equalization

560.0120

Memorandum
To:

San Diego – Auditing (SJG)

From:

Headquarters – Sale Tax Counsel (BH)

Subject:

Public Housing Administration

Date:

January 24, 1956

This is a comment on your letter of January 13 to Mr. Mangels.
From an examination of the statutes and executive orders, we have concluded that the Public Housing Administration is an incorporated instrumentality of the United States. Accordingly, a purchase from the Public Housing Administration is subject to use tax whether surplus property or not. You state that some sales by the Public Housing Administration are of buildings “in place". If the purchaser is to use the building at its existing location under a lease, the sale is exempt as a sale of real property. Any equipment included would, of course, be taxable. BH:tl

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