Ezel / Tax Rulings / CA

Was a printed garment-guarantee notice enclosed with the product purchased for resale or consumed as advertising?

Short answer A genuine guarantee notice delivered with the garment was purchased for resale, but primarily advertising material was consumed by the manufacturer. The source could not classify the actual notice without seeing it.
State
CA
Ruling
Annotation 280.0520
Tax type
Sales and Use Tax
Issued
1951-10-08
Issued by
California State Board of Equalization
Requested by
A garment manufacturer asking about printed guarantee notices (identity redacted)
Topics
advertising materials conditional guidance resale exemption
Source
View Original PDF

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.

Currency note: this ruling is from 1951
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 Oct. 8, 1951 tax-counsel letter gives only a conditional guarantee-versus-advertising rule and expressly declines a definite taxpayer-specific result because the notice was not supplied. The PDF does not reproduce the Sept. 19 request, notice, attachments, or Ruling 49 copy previously sent July 13. CDTFA's current annotation states the conditional result but supplies no later notice submission or classification. Another taxpayer should check current guarantee-notice, garment-insert, advertising-material, primary-purpose, resale, printing, evidence, recordkeeping, and sales-and-use-tax law. Another taxpayer should not treat it as binding. 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

A garment manufacturer placed a printed notice in a garment pocket. The notice contained a garment guarantee and a description of the manufacturer, but the agency did not receive a copy to examine.

The letter said a guarantee notice delivered to the garment buyer was part of the property sold, making the printer's sale to the manufacturer a sale for resale. Primarily advertising material enclosed with sold property was instead consumed by the manufacturer and taxable to it under historical Ruling 49.

Because the source lacked the actual notice, it gave no definite result for this manufacturer. The resale treatment was conditional on the insert being a guarantee notice rather than primarily advertising.

Citations and references

  • Historical California Sales and Use Tax Ruling 49, last paragraph — characterized in the official PDF; copy previously forwarded July 13, 1951 but not reproduced there
  • Manufacturer's Sept. 19, 1951 letter — question recited; letter and attachments not reproduced in the official PDF
  • Garment guarantee and manufacturer-description notice — contents described but actual notice expressly absent, preventing a definite ruling
  • Official Annotation 280.0520's conditional guarantee-notice, primarily-advertising, and garment-resale summary — annotation supplies no notice copy, Ruling 49 text, later submission, or definite taxpayer-specific result
  • Possible later notice submission, agency classification, purchase, return filing, audit, assessment, payment, refund claim, appeal, or other outcome — not supplied in the official PDF

Source

Original ruling text

280.0520

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

October 8, 1951

C--- – G--- M--- Co.
XXX-XX --- --- Street
--- --- XX, California
Gentlemen:
This is in reply to your letter of September 19, 1951, in which you ask concerning the application of tax to a printed notice which is placed in the pocket of a garment you manufacture, and which contains a guarantee of the garment and a description of the manufacturing company. Please be advised that in our opinion a notice of guarantee of a garment which is given to the purchaser is a part of the property sold, and the sale to you of such a notice is a sale for resale to which tax does not apply. On the other hand, you are the consumer of advertising material which you enclose with the property sold, and tax applies to the sale of such advertising material to you, as indicated by the last paragraph of Sales and Use Tax Ruling 49, a copy of which was previously forwarded to you on July 13, 1951. Since we do not have a copy of the particular notice before us, we are unable to give you a definite ruling in this particular case. If you wish to forward a copy of the notice we shall be glad to give further consideration to the question. Very truly yours,

R. G. Hamlin
Tax Counsel

AOC:ja

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