Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 330.3168


330.3168 Wind Power Facilities. A firm enters into a construction contract with an investor to build a wind power facility. The wind power facility is constructed on property leased by the firm from a third party and subleased to the investor. The owner of the wind power facility (the sublessee of the land) leases the wind power facility to a lessee together with its interest in the real property.

The components of the supporting tower of the wind facility are "materials" and the wind turbine head is a "fixture." Accordingly, the contractor is the consumer of the components of the supporting tower and the retailer of the wind turbine head.

Since section 6016.3 excludes from the definition of tangible personal property leased fixtures when the lessee is also the lessee of the land, the lease of the wind turbine facility is not a lease of tangible personal property. The concept is equally applicable to situations in which the parties involved are sublessors and sublessees.

Under the above circumstances, the contractor is subject to tax on materials and fixtures, and the lease is a lease of real property. 11/4/86.