A. S. Schulman Electric Co. v. State Board of Equalization

This appeal by the State Board of Equalization (Board) from adverse judgments in two refund suits by A. S. Schulman Electric Company (taxpayer) poses primarily the question of the pre-1965 taxability under the Sales and Use Tax Law of the cost of the labor expended by the taxpayer in largely on-site assembly of certain electrical power transmission and distribution facilities for Southern California Edison Company (Edison), a privately owned public utility. The Board takes the position that, aside from installation labor (the bolting of the steel towers to their foundations and the placing of the wooden poles into the ground (§§ 6011, subd. (c)(3), 6012, subd. (c)(3)), both the labor and the material costs of the erection of these lines were taxable under section 6006, subdivision (b), as being essentially the fabrication of tangible personalty for a consideration for a consumer who furnished the materials used in such work. The subdivision makes such work a sale of tangible- personalty. The taxpayer’s view, on the other hand, is that the labor at issue was not taxable fabrication labor within the meaning of section 6006, subdivision (b), but was rather installation labor…