Following an appeal, a California Court denied a taxpayer refund claims on taxes paid on telephone cables, conduits, and telephone poles. Under California code, cables, conduits, and poles purchased by the taxpayer as pre-installation component parts are considered tangible personal property and are thus subject to tax.
Fully installed and completed telephone and telegraph lines, electrical transmission and distribution lines, and the poles, towers or conduit in which they are supported or in which they are contained are excluded from sales and use tax – not the pre-installed component parts of the lines. To fall within the scope of the statutory exemption, telephone or telegraph lines must already be ‘supported’ or ‘contained’ – i.e. completed and installed. (Verizon California, Inc. v. California Department of Tax and Fee Administration, Court of Appeal of California, Third District, No. C084551, July 23, 2019)