Did temporary fitting tacks substantially change tax-paid tuxedos before rental?

Plain-English summary

Hollywood Auditing sent an absent August 9, 1966 memorandum about an unidentified taxpayer's tuxedo alterations. As restated, the lessor bought tuxedos in different sizes for rent and reported tax on the amount paid for the garments.

To fit individual customers, the lessor used temporary tacks to shorten sleeves and trousers and adjust the waist. The official PDF visibly prints the final words as “waist and cost,” leaving that second term unresolved. After each rental, the tack was removed and the garment returned to rental stock.

The memorandum concluded that these temporary alterations did not substantially change the purchased garments. Because the lessor had paid sales tax measured by original purchase price, former Ruling 70(c)(2)(D) made the rent not subject to sales tax.

The August 9 request and statement of facts, taxpayer identity, garment invoices and tax reporting, rentals/returns, audit and later outcome are absent. Live Annotation 330.4180 gives the same narrow result but attributes it to Regulation 1660, an authority the underlying memorandum does not cite.

Common questions

What alterations did the lessor make?

Temporary tacks shortened sleeves and trousers and adjusted the waist. The source's additional printed word “cost” is not explained.

Why were the rental receipts excluded?

The lessor had paid tax measured by the garments' purchase price, and the removable tacks did not substantially change their form.

Would permanent alterations necessarily receive the same treatment?

The source does not decide that question. Its conclusion depends on temporary adjustments that were removed after each use.

Did the memo cite Regulation 1660?

No. The live annotation does, but the memorandum itself cites former Ruling 70(c)(2)(D).

Was an actual return, audit or rental-tax outcome shown?

No. The source provides internal guidance without the underlying transaction or reporting records.

Citations and references

• Historical Sales and Use Tax Ruling 70(c)(2)(D) — same-form tax-paid rental rule cited; text absent
• Live Annotation 330.4180 — same result attributed to Regulation 1660, which the PDF does not cite
• Request, facts, identity, garment purchase/tax records, rentals/returns, audit and outcome — absent

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: Annotation 330.4180
• Original supporting opinion: 330.4180 PDF

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Hollywood – Auditing (CFH)

330.4180

Date:

August 25, 1966

From:

Subject:

This memo is in response to yours of August 9, 1966, concerning the taxability of the alterations the above named taxpayer is making to the tuxedos he places in rental services. From the statement of facts, we understand that the taxpayer purchases for rental, tuxedos in various sizes. He reports the tax based on the amount he pays for the garments. It is sometimes necessary for the taxpayer to make minor adjustments of the rental garment in order that it will properly fit the customer. This adjustment is accomplished by making a temporary, tack to shorten the sleeves and trousers and to fit the waist and cost. After the rental use, the temporary tack is removed, and the garment is returned to the rental stock. We are of the opinion that the above described “alterations” do not substantially change the form of the garments taxpayer purchased for rental service. Therefore, since he paid sales tax measured by the original purchase price of these garments, the rental receipts therefrom are not subject to the sales tax per ruling 70 (c) (2) (D).

CLR:ab
cc:

Los Angeles District – District Administrator