Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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190.0000 CONSTRUCTION CONTRACTORS—Regulation 1521

Annotation 190.0160.400


190.0160.400 Computer Installed in Special Purpose Buildings. Computer systems installed in special purpose buildings in conjunction with the installation of automated water, electricity, and sewage control systems are fixtures and improvements to real property rather than personal property.

In Bank of America v. County of Los Angeles, 224 Cal.App.2d 108 (1964), the stated systems were considered improvements to real property (fixtures) under the following facts:

(1) The buildings were special purpose buildings.

(2) The components of each system were interconnected by hundreds of signal and power cables. The floor of the building was raised to accommodate the cables.

(3) Air conditioning and humidity control was installed for optimum operating efficiency.

(4) Substantial expense would be entailed in relocation of any of the components.

(5) Some connections were made by rigid iron pipes.

(6) Great expense would be incurred in moving the heavy equipment.

(7) The size and weight (11 tons to each system) militates against moving the equipment.

Thus, such installation of computer systems are considered fixtures under Regulation 1521 and tax applies as set forth in subsection (b). 3/31/80.