Could a mortuary supplier sell soap to morticians for resale without California sales tax?

Plain-English summary

Sales of soap by mortuary suppliers to morticians were taxable retail sales. The staff used two historical tests for whether mortuary property was resold: whether it stayed with the remains and whether it was used only in a single interment.

Soap was presumed to be removed from the body immediately after application, so the mortician consumed it rather than reselling it. Waste during use did not determine resale treatment.

A supplier could sell property without tax under a resale certificate only when the mortician resold that property, including items that remained with the body. The letter noted that the audit was still pending and described later petition rights.

Source and live-annotation limits

The letter does not reproduce the June 14 inquiry, Mr. Cudworth's letter, the other redacted letter it quotes, or Ruling 8. It does not identify the addressee, inquirer, supplier, mortician, Oakland representative, or audited taxpayer, and supplies no soap, embalming fluid, cosmetics, body-care practice, waste, invoices, resale certificate, tax return, district audit report, notice of determination, petition, hearing, completed transaction, or later outcome. The source prints “customar1y,” “tact,” and “using or”; those defects remain in the original text.

The live annotation states only that soap sales to morticians are taxable retail sales. It omits the correspondence and pending-audit posture, Ruling 8 and section 6015, stays-with-remains and single-interment tests, 50% historical measure, removal assumption, waste analysis, resale-certificate condition, petition and hearing rights, missing records and enclosure, source defects, and later-outcome gap.

What this means for you

Mortuary suppliers, morticians, and tax professionals

Document whether each product remains with the body, whether it is used for one interment, actual use and removal, waste, invoices, and a complete resale certificate. Do not treat the source's historical 50% Standard Service rule as current without checking present law.

Common questions

Did the fact that soap was used on the body make it a resale item?

No. Its removal after application made the supplier's sale taxable.

Did product waste change the classification?

No. The letter said waste was not determinative.

When could a mortuary supplier accept a resale certificate?

For property actually resold by the mortician, including qualifying items that remained with the body.

Citations and references

• California Revenue and Taxation Code section 6015 and historical Sales and Use Tax Ruling 8 — mortician retailer treatment discussed
• June 14 inquiry, Mr. Cudworth letter, redacted correspondent letter, district audit report, notice of determination, and possible petition and hearing — described or referenced but not included

Verbatim support

From the official July 3, 1957 letter:

Since presumably soap is removed from the body immediately after its application, it is our opinion that sales of soap to morticians should be considered as retail sales subject to tax.

We have not at any time considered the fact that waste may occur in the using or such property as determinative of the fact of whether or not it is to be treated for tax purpose as being sold by the mortician.

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/370-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/370-0180.pdf

Original ruling text

370.0180

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

1253 SALES OF SOAP TO MORTICIANS.

July 3, 1957

PLEASE RETURN TO LEGAL FILES

Dear Mr. --This is in reply to an inquiry of June 14 which we received from --- --- --- concerning the application of the sales tax to the sale of soap by suppliers to morticians. As you are no doubt aware, Sales and Use Tax Ruling 8, copy enclosed, which is one of the administrative interpretations of Section 6015 of the Sales and Use Tax Law, provide that morticians are retailers of the tangible personal property furnished in connection with rendering their service and that tax applies to the sale by them of all tangible personal property so furnished. The ruling further states that with respect to items other than clothing, boxes, vaults and "extras" or property furnished in addition to that customar1ly furnished with standard service, the tax shall be computed on the basis of 50% of the charge made therefor. In determining whether an item of tangible personal property is to be considered as sold by the mortician rather than as being consumed by him, we have consistently used as basic tests the tact of whether or not the property involved stays with the remains and also whether or not the item in question is used only in a single interment. Since presumably soap is removed from the body immediately after its application, it is our opinion that sales of soap to morticians should be considered as retail sales subject to tax. From Mr. Cudworth's letter it appears that you are somewhat confused by the fact that there is a certain amount of waste or loss which occurs in applying such things as embalming fluid and cosmetics. We have not at any time considered the fact that waste may occur in the using or such property as determinative of the fact of whether or not it is to be treated for tax purpose as being sold by the mortician. We also feel that you may have misunderstood the Oakland office representative from the statement contained in Mr. ---’s letter to the effect that "he was told that all things used in or on the body was not taxable by him to the mortician". Only when sales are made by mortuary suppliers to morticians of property which is resold by the mortician, including those items which remain with the body, will said supplier be exempted from liability for sales tax provided a proper resale certificate is obtained.

The report of audit has not yet reached this office from our District Office. If you still disagree with our conclusion, you may file petition for redetermination after receipt of notice of determination, requesting an oral hearing if you so desire.

Very truly yours,

James J. Delaney
Assistant Tax Counsel

JJD.rc
Enclosure
cc: Oakland - Auditing