Ezel / Tax Rulings / CA

Did breeding and producing litters create taxable use of chinchillas still held for resale?

Short answer No. California said the chinchillas remained held for sale despite producing litters; taxable use began only when resale holding ended or another use occurred.
State
CA
Ruling
Annotation 110.0040
Tax type
Sales and Use Tax
Issued
1953-11-06
Issued by
California State Board of Equalization
Requested by
A Board tax administrator asking whether breeding chinchillas created taxable use before the owner began resale operations
Topics
chinchillas breeding seller permits taxable use inventory
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1953. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1953
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an internal California State Board of Equalization legal memorandum dated November 6, 1953, published by CDTFA as support for a sales and use tax annotation. Its conclusion assumes the owner still intended to obtain a seller's permit and sell the chinchillas rather than use them for another purpose. Another taxpayer should not treat it as binding and should check current chinchilla, breeding, litter, resale-intent, seller-permit, inventory, taxable-use, and sales-and-use-tax rules. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Pairs of chinchillas bought for resale were not put to taxable use merely because they had been bred and produced litters. The owner still intended to obtain a seller's permit and sell them.

Taxable use would begin when the owner stopped holding the chinchillas for sale or used them for another purpose.

Citations and references

  • No specific statute or regulation was cited in the published memorandum.

Source

Original ruling text

STATE BOARD OF EQUALIZATION
OFFICE CORRESPONDENCE

110.0040
Sacramento
November 6, 1953

To:

Redding – Tax Administrator

From:

Headquarters – Sales Tax Counsel

Re:

W--- K. G--Box XXXX
--- XXXXX

It appears from your memo of September 23 that Mr. G--- purchased a number of pairs of chinchillas intending to resell them, but has not yet obtained a seller’s permit. If it is still his intention to sell them upon obtaining a seller’s permit, he will not be deemed to have made a taxable use of them until such time as he no longer holds them for sale or uses them for any other purpose. The fact that they had been bred before being received by him and since received by him a number of the pairs have had litters does not, in our opinion, constitute a use of the chinchillas by Mr. G---.

E. H. Stetson

EHS:ph

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