Was a subcontractor that poured tilt-wall panels and other concrete work—but did not physically erect the panels—a manufacturer or a contractor?

Plain-English summary

A general contractor supplied materials for a tilt-wall building, while the reviewed company supplied concrete labor. It poured foundations, curbs, sidewalks, wall panels, plug concrete, patches, and the final slab. A separate erection company lifted and welded the wall panels into place.

Although it did not operate the crane, the concrete company remained responsible for correct wall placement—including matching painted or cement patterns—and was not paid until the walls were set correctly.

Based on the complete transaction, the Comptroller classified the company as a contractor rather than a manufacturer.

What this means for you

Physical performance of only one project stage did not control classification. The subcontractor's overall construction responsibility and integration of its concrete work into the building supported contractor status.

Common questions

Did the company physically erect the walls? No. Was it still a contractor? Yes. What responsibility mattered? It had to ensure correct wall placement and complete the connected concrete work before payment.

Citations and references

• The internal memorandum does not identify a numbered statute or administrative rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9111L1145A05

Original ruling text

DATE: November 25, 1991

TO: Cindi Thur, ** Audit ****

FROM: Jo Ann Dieck, Tax Administration Division

SUBJECT: **

As I understand from the information presented (your memo, the taxpayer
attorney's letter, and invoices), COMPANY A is a general contractor who
is constructing a building using the tilt-wall method of construction.
COMPANY A contracts with COMPANY B to perform the concrete work at the
job site. COMPANY A provides all of the materials and COMPANY B provides
the labor connected with the concrete work. COMPANY A contracts with an
erection company to erect all of the wall panels and all of the
structural steel, beams, etc. and also to set all of the wall panels.
The erection company uses a crane to set the wall panels up and then
ties them in with welding.

COMPANY B pours the foundation, curbs, and sidewalks.They set the forms
for the walls and pour the concrete at the job site. Lifters
(reinforcement bars) are placed in the concrete in order to lift the
walls when the concrete is dry. The erection company lifts the walls
and sets them in place as described above. The lifter rods are removed.
COMPANY B pours a little concrete around the wall (this is the plug).
COMPANY B then concrete patches the holes as well as any other areas
that may have been scraped or marred. The final floor slab is poured
to tie walls, foundation, and floor slab into one continuous piece.

Although COMPANY B does not actually lift the walls and set them in
place, COMPANY B has the responsibility to be sure that the walls are
set up correctly. For example, some of the walls may have a "stripe"
(either painted or cement pattern) that has to be matchedon both sides.
This is a part of the contract, and COMPANY B does not get paid until
the walls are set up correctly.

The question is whether COMPANY B is a manufacturer of the wall panels
or a contractor.

RESPONSE: Based on all of the facts presented, COMPANY B is a
contractor in this transaction. COMPANY B is responsible for
construction of the walls and other cement work.

This opinion is based on the facts presented and applies to this
transaction. If there are additional or different facts, the opinion
may change.