Which water-purification chemical refund claims did California allow for sodium hexametaphosphate, ferric sulfate, lime, and soda ash?

Plain-English summary

A city disputed the tax treatment of chemicals used in water purification. After consultation with a college expert, the Board addressed ferric sulfate and sodium hexametaphosphate, then also discussed lime and soda ash.

The ferric-sulfate refund claim was disallowed. Its useful function was to create a precipitating “floc” that trapped suspended particles; iron that did not precipitate remained in the water as an undesirable substance. The water of crystallization also was not a necessary component for the chemical's intended use.

The sodium-hexametaphosphate refund was approved. The expert described it as improving water for consumption by preventing calcium from reacting with soap and acting as a softener, making it a valuable incorporated component of the water sold.

The Board also said lime and soda ash could be treated as purchased for resale and instructed the Petitions Unit to allow the refund claim for those items. The stated reasoning was that they helped remove calcium and magnesium by raising pH and that the sodium hydroxide ion helped keep the water slightly alkaline.

Citations and references

• No statute or regulation was cited in the published supporting opinion.
• City's April 18, 1962 letter concerning refund treatment for water-purification chemicals — letter referenced but not reproduced in the official PDF
• April 1962 consultation with Mr. T--- of the city's office concerning the disputed chemicals — exact date, other participants, questions, notes, and separate record not provided in the official PDF
• Mr. Knowles's referral of the chemical questions to Dr. C. R--- H--- of a state college — referral referenced without date, request, analysis, or separate record in the official PDF
• Dr. H---'s letter explaining ferric sulphate, sodium hexametaphosphate, lime, and soda ash in water purification — ferric passage quoted and other conclusions characterized; date and complete letter not reproduced in the official PDF
• Unidentified Public Health Service recommendation limiting combined iron and manganese to 0.3 parts per million — attributed without publication, date, section, text, test method, or URL
• City refund claims for ferric sulphate, sodium hexametaphosphate, lime, and soda ash and instruction to the Petitions Unit — outcomes directed; claim dates, amounts, identifiers, purchases, invoices, tax payments, petitions records, and issued refunds not reproduced in the official PDF
• Chemical formulations, dosing, floc and precipitation, residual iron, water of crystallization, calcium-soap reaction, softening, pH, sodium-hydroxide-ion, incorporation, and water-sale evidence — selected expert facts supplied; complete analyses, treatment records, tests, and water records not reproduced in the official PDF
• Official Annotation 275.0460's sodium-hexameta-phosphate, lime, and soda-ash summary — annotation omits the shared letter's ferric-sulphate disallowance, separates “Hexameta Phosphate” in its title, and supplies no additional expert, claim, or refund record
• Possible later Petitions Unit action, refund issuance or denial, chemical or process review, audit, assessment, appeal, or other agency action — no follow-up or final outcome 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/275-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/275-0460.pdf

Original ruling text

275.0460

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

May 21, 1962

The City of [S]
--- --- X
California
Attention:

-- - XXXXX

Mr. L. D. P--Auditing Division Supervisor

Gentlemen:
After receiving your letter of April 18, 1962, and consulting with Mr. T--- of your office, who was in Sacramento last month, our Mr. Knowles referred the matter of the use of chemicals in water purification to Dr. C. R--- H--- of --- State College. Only two chemicals remained in dispute, as we understand the situation. These are ferric sulphate and sodium hexametaphosphate. As to the former, Dr. H---’s letter to us states: “1. Ferric (iron) sulphate is added to the water to generate a voluminous precipitate (called a ‘floc’) which has the beneficial effect of trapping finely divided, suspended particles. The iron which does not precipitate remains in the water as an undesirable substance. The recommended maximum limits of iron and manganese together is 0.3 parts per million according to the Public Health Service. “As to the water of crystallization in the ferric sulphate purchased, this is not a necessary component of the compound for the purpose for which it is used and is obviously not what you are paying for when you buy the compound. I believe you on firm, factual grounds in your opinion concerning this compound.” Accordingly, it is our opinion that your claim for refund as to this chemical should be disallowed. As to sodium hexametaphosphate, Dr. H--- calls our attention to the fact that it improves water for consumption in that it prevents calcium from reacting with soap and often is added to the water as a way of “softening” it. He states that it is a “valuable, incorporated component of the water sold.” We will, accordingly, approve a refund of tax paid with respect to purchases of this chemical.

The City of [S]
-- - XXXXX

-2-

May 21, 1962
275.0460

Dr. H--- also mentioned that lime and soda ash are added to water to aid in the removal of calcium and magnesium by raising the pH. Since the sodium hydroxide ion has the virtue of keeping the water slightly alkaline, we believe you may properly treat it as purchased for resale and we will instruct our Petitions Unit that your claim for refund on these items should be allowed. Very truly yours,

E. H. Stetson
Tax Counsel

EHS:ac
cc:

--- --- – Tax Administrator