Richard Boyd Industries, Inc. v. State Board of Equalization

This case involves the differing tax consequences between a contractor’s consumption of “materials” and its sale of “fixtures” as defined in section 1521 of the Board of Equalization’s (Board) Sales and Use Tax Regulations (Cal. Code Regs., tit. 18, § 1521; hereafter Regulation 1521). Richard Boyd Industries, Inc. (Boyd) manufactures and installs various kinds of signs on real property. During the audit period in question, Boyd purchased all its supplies free of tax for resale and issued valid resale certificates to its suppliers. However, Boyd did not report sales tax on the sales of the fixtures that it installed. Boyd concedes the deficiency assigned by the auditor on its consumption of materials but disputes the portion of the deficiency assigned to its sales of fixtures. We reject Boyd’s attempt to redefine the term “fixtures” in Regulation 1521 to mean personal property that is not permanently attached to real property.

Procedural and Factual Histories

On March 31, 1997, Boyd filed a first amended complaint for refund of sales and use tax and declaratory relief. The complaint also included Commercial Neon, Inc., as a party plaintiff. The gist of the action for…