Albers v. State Bd. of Equalization

• Decision Date: 18 October 1965
• Citation: 47 Cal.Rptr. 69,237 Cal.App.2d 494
• Court: California Court of Appeals Court of Appeals
• Parties: Robert W. ALBERS, Plaintiff and Respondent, v. STATE BOARD OF EQUALIZATION of the State of California et al., Defendants and Appellants. Civ. 22603.

Page 69

47 Cal.Rptr. 69

237 Cal.App.2d 494

Robert W. ALBERS, Plaintiff and Respondent, v. STATE BOARD OF EQUALIZATION of the State of California et al., Defendants and Appellants.

Civ. 22603.

District Court of Appeal, First District, Division 2, California.

Oct. 18, 1965.

Hearing Denied Dec. 15, 1965.

Thomas C. Lynch, Atty. Gen., Ernest P. Goodman, John J. Klee, Jr., Deputy Attys. Gen., San Francisco, for appellant.

Lemuel D. Sanderson, San Francisco, for respondent.

AGEE, Justice.

The lower court ordered defendant Board of Equalization to refund $55.57 to plaintiff, paid by him as sales tax on transactions of the type described below. The Board appeals.

The facts are not in dispute and the sole issue is whether such transactions are taxable as sales of tangible personal property within the meaning of the California Sales and Use Tax Law. (Revenue and Taxation Code, § 6001 et seq.) ¹

Plaintiff is a self-employed commercial draftsman who maintains his own office. He makes detailed drawings for architects, engineers and business firms based upon specifications and other data furnished by the person or firm placing the order.

Plaintiff's charges are based upon the time actually spent by him in producing the drawings and are computed at a straight hourly rate.

The drawings are made on paper which is either furnished by the customer or by the plaintiff. In either instance, the drawing bears the name of the customer, not that of plaintiff, and becomes the customer's property upon completion and delivery.

Plaintiff is not an architect and none of the concepts, ideas or designs depicted in the drawings produced by him are of his own determination. Neither is plaintiff an engineer nor are any of the specifications or other details shown in such drawings determined by him.

The portion of section 6006 which is specifically applicable herein is: "Sale' means and includes: * * * (f) A transfer for a consideration of the title or possession of tangible personal property which has been produced, fabricated, or printed to the special order of the customer * * *.'

People v. Grazer (1956) 138 Cal.App.2d 274, 291 P.2d 957, 958, held this provision to be applicable to the following facts: '[t]hat during the tax period ² Grazer was engaged in the business of taking X-ray pictures of persons referred to him by physicians and surgeons; that he employed a qualified radiologist to read the X-ray pictures and to report his findings to the referring physician; that the pictures were at all times the property of Grazer and were always kept in his possession except during any period that a picture ordered by a physician was taken out of Grazer's laboratory for the purpose of examination by the physician who had ordered it; that the pictures were always returned to Grazer when the physician had completed his use thereof in connection with past treatment; that Grazer kept the pictures on file in his laboratory at all other times; that Grazer took no pictures except on request of a licensed physician, surgeon, dentist or osteopath and never delivered a picture directly to a patient for his use; * * * that the fee charged him was principally for services performed in picture taking and developing, and in the payment of the fees of the radiologist to report his findings to the referring physician or surgeon; that the cost of the materials and supplies used in taking the pictures was only a small part of the total charge made by Grazer for picture taking, producing, developing and for the radiologist's report thereon; that Grazer never read or reported on any X-ray picture taken by him; * * *.'

A judgment holding that no sales tax was due or payable was reversed, the appellate court stating: 'To be sure, the raw materials consumed in producing that which he ordered may have cost the laboratory only a very small part of the charge made. The expense of the producer of the pictures is almost entirely the cost of the skilled services of the radiologist and the technicians and the use of equipment which is generally quite costly. But the price charged for all taxable transfers is more often than not largely a charge for services rendered in connection with the tangible object transferred. That Grazer retained title to the pictures is immaterial. The tax is also laid upon a transfer of possession and the evidence shows and the court found that these pictures served the only purpose for which they were required when they passed into the possession of those who ordered them for use in diagnoses and treatment of their patients. This was such an effective transfer of possession as to justify the imposition of the tax.'

The facts in Grazer are closely parallel to the facts in the instant case. In each, the true object of the transaction is the finished article, the X-ray film in Grazer and the drawing in the instant case.

Plaintiff herein was not paid to conceive or to dictate any of the ideas, concepts, designs, or...