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 190.2112


190.2112 Satellite Dishes. A taxpayer is engaged in the sale and installation of satellite dishes for television reception. The taxpayer made sales to two general stores located in remote areas. The dishes were affixed by the taxpayer to foundations designed to hold them in place. The dishes were sold for resale as an inventory item of the purchasers (general stores).

Annexation of personal property to realty is not the sole criterion for purposes of determining what constitutes a fixture. The following lists may be used to ascertain whether an article is a fixture in a given case: (1) the manner of its annexation to realty; (2) its adaptability to the use and purpose for which the realty is used; and (3) the intention of the party making the annexation. (Standard Oil Co. v. State Board of Equalization, 232 Cal.App.2d 91 (1965).) Of these three factors, the intention of the parties is generally the controlling criterion in ascertaining whether property is a fixture or remains personal property. (Camp v. Matich, 87 Cal.App.2d 660 (1948).)

It must be borne in mind that both purchasers are general merchandise outlets located in remote and sparsely populated areas and they are the only such retail location in their respective areas. It is understandable that such establishments would have an inventory of only one satellite dish and that it would be properly displayed. Both of the dishes were ultimately resold. Finally, the manner of affixing the dishes to the foundation was such that they could quickly and easily be removed. Accordingly, the two sales constituted exempt sales for resale. 4/22/88.