Ezel / Tax Rulings / CA

Were pneumatic lifts machinery and equipment under the historical construction-contractor rule?

Short answer No. California treated the lifts as real-property improvements and applied tax to their cost price or to the materials used to manufacture them.
State
CA
Ruling
Annotation 565.0460
Tax type
Sales and Use Tax
Issued
1955-05-24
Issued by
California State Board of Equalization
Requested by
San Jose auditing staff
Topics
construction contractors real property machinery and equipment cost price
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1955. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1955
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 short May 24, 1955 internal memorandum states its conclusion after reviewing an earlier audit memorandum and enclosure that are not reproduced in the official PDF. It applies historical Ruling 12 but gives no description of the lifts, their installation, or the taxpayer's contract. CDTFA says statutory law controls if it conflicts with an annotation. Lift design, attachment, removability, fabrication method, contractor role, contract facts, and current Regulation 1521 can change the result.
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

After reviewing an audit memorandum and enclosure, Board counsel concluded that the pneumatic lifts were improvements to real property and were not machinery and equipment under historical Ruling 12.

The tax therefore applied to the taxpayer's cost price for the lifts. If the taxpayer manufactured them, the memorandum instead applied tax to the cost of the materials used to make them.

The official source does not describe the lifts or reproduce the earlier audit materials, so it does not reveal which physical features drove the classification.

Common questions

Were the lifts machinery and equipment?

No.

How were they classified?

As improvements on or to real property.

What amount did the memorandum tax?

The cost price of purchased lifts or the materials used to manufacture them.

Citations and references

  • Historical Sales and Use Tax Ruling 12 — real-property-improvement versus machinery-and-equipment classification applied
  • April 4 audit memorandum and enclosure — reviewed by counsel but not reproduced in the official PDF

Source

Original ruling text

State of California

Board of Equalization

565.0460
Memorandum
To:

San Jose - Auditing

From:

Headquarters – Sales Tax Counsel (EHS)

Subject:

REDACTED TEXT

Date:

May 24, 1955

Following review of your memorandum of April 4 and its enclosure, it is our conclusion that the pneumatic lifts are “improvements on or to real property” and are not machinery and equipment within the meaning of Ruling 12. I find that we have consistently regarded similar types of property as not included with the category of machinery and equipment as used in Ruling 12. The tax accordingly applies to the cost price to taxpayer of the lifts or materials from which the lifts are manufactured. E. H. Stetson

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