Could a combination mattress law tag and shipping-container production ticket receive a partial sales-tax exemption?
Apply this to your situation
This page answers the general question as of 1951. Ask about yours and see what current California tax law says, with citations.
Plain-English summary
A customer claimed that about half of a combined law tag and production ticket should be exempt because one portion was attached to a mattress and another portion to the mattress's shipping container.
California found that the container portion was a taxable shipping tag. More broadly, the combined article as a whole was not purchased for resale.
Counsel found no basis to divide the gross receipts and exempt a percentage. Tax applied to the full sales price.
Common questions
Did physical measurement of the two portions control?
No.
Was the mattress-attached portion separately exempted?
No. The letter treated the combined article as one purchase not wholly for resale.
Citations and references
- Sales and Use Tax Ruling 49, last paragraph — historical shipping-tag treatment applied; copy listed as enclosed but not included in the official PDF
- Requester's November 12 letter, submitted sample, and excerpt from the customer's letter — year and separate materials not supplied in the official PDF
- Copy to a redacted recipient — copy recipient listed; no separate transmittal record supplied in the official PDF
Source
- Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
- Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/195-0000-all.html
- Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/195-2020.pdf
Original ruling text
195.2020
STATE OF CALIFORNIA
STATE BOARD OF EQUALIZATION
November 21, 1951
C--- C--- Corporation
--- --- Avenue
--- X, New York
Account
- XXXXX
Gentlemen:
This is in answer to your letter of November 12 in which you enclosed a sample of the combination law tag and production ticket you sell to the E--- Co., Inc., which it claims should be 50% exempt from sales tax. The excerpt of the letter you received from the E--- Company indicates that its basis for considering the combination tag and label partially exempt is that a part of it is attached to the mattress and a part is attached to the shipping container in which the mattress is packed. By its measurements the parts attached to the container and mattress approximate 49% of the combination tag and label. Our examination of the combination tag and label indicates that the section marked “B” which is attached to the shipping container constitutes a shipping tag and is subject to the tax, as indicated by the last paragraph of Sales and Use Tax Ruling 49, copy enclosed. Consequently, the ratio forming the basis of your customer’s contention appears incorrect. Regardless of the uses of various parts of the combination tag and label it is our opinion that the tax applies with respect to the full sales price as the entire article is not purchased for resale, and we are unaware of any basis for classifying a part of the gross receipts received from such sales as nontaxable. Very truly yours,
R. G. Hamlin
Tax Counsel
RHG:jaa
cc:
F--- T. L---
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