Could an optometrist's sale of optical equipment and fixtures qualify as an exempt occasional sale?

Plain-English summary

A public accountant asked about optical equipment and fixtures used to grind lenses and dispense glasses to patients. Under section 6018, the letter treated an oculist or optometrist furnishing patient glasses as the consumer rather than a retailer of those glasses.

Equipment used only in that consumer activity could therefore qualify for occasional-sale treatment under section 6006.5 because it was not held or used in an activity requiring a seller's permit.

The result changed for equipment or fixtures used to sell sunglasses or miscellaneous taxable merchandise. Because those retail sales required a seller's permit, selling equipment connected with that activity could not qualify as an occasional sale.

Conditional asset classification and source limits

Tax Counsel E. H. Stetson answered a March 30 letter from public accountant V. D---. The source supplies no year for that request date and does not name the accountant's oculist or optometrist client. The question concerned optical equipment and fixtures used to grind lenses and dispense glasses when the patient-glasses transaction itself was not taxable.

Counsel understood the question to concern an oculist or optometrist treated under section 6018 as the consumer of glasses furnished to a patient. Because that professional was not regarded as selling tangible personal property in that activity, the equipment sale could fall within section 6006.5 as property not held or used in a permit-requiring activity.

The letter did not grant blanket treatment to the equipment. It said the professional apparently sold sunglasses and miscellaneous items on which sales tax was due. Any equipment or fixtures held or used in that selling activity involved a required seller's permit and could not qualify as an occasional sale. The conclusion therefore turns on each asset's actual use.

The closing says, We trust that this clarifies our prior letter. The official PDF does not include or identify that earlier letter, so this page cannot determine what advice was clarified or changed.

The PDF does not include the March 30 request, prior letter, client identity or professional records, patient prescriptions or glasses transactions, equipment and fixture inventory, use evidence, sunglasses or merchandise inventory and sales, seller's permit, sale agreement, price or allocation, return, tax calculation, assessment, payment, refund claim, protest, appeal, or later outcome. It provides conditional advice and does not establish that any equipment was sold or how tax was ultimately administered. It copies the Los Angeles Tax Administrator.

The live annotation preserves the oculist-or-optometrist consumer treatment, potential occasional-sale result, sunglasses and miscellaneous retail activity, equipment-use distinction, and April 28, 1953 date. It omits the accountant and request, lens grinding and patient dispensing, apparent qualification on the merchandise facts, sections 6018 and 6006.5, missing prior letter, copied administrator, conditional posture, missing records, and absent transaction and tax outcome.

What this means for you

Optical professionals selling business assets

Classify how each asset was used. Equipment dedicated to patient-glasses services received different treatment from equipment supporting taxable merchandise sales.

Accountants and tax professionals

A business can have both consumer and retailer activities. Tie individual equipment and fixtures to the relevant activity before applying the occasional-sale rule.

Common questions

Q: How did the letter treat patient glasses?
A: The oculist or optometrist was treated as their consumer under section 6018.

Q: Could equipment used only for that activity qualify?
A: Yes, the letter said its sale could be an occasional sale.

Q: What retail activity changed the result?
A: Selling sunglasses or other miscellaneous taxable items.

Q: Was every piece of optical equipment automatically taxable when sold?
A: No. The answer depended on the activity in which the item was held or used.

Q: Did the source say an equipment sale actually occurred?

A: No. It answered how a possible sale could be treated but gives no agreement, transfer, price, return, assessment, or payment.

Q: Were the sunglasses and merchandise facts definite?

A: The letter said the professional apparently made those sales. The request and business records are not included.

Q: What did the earlier Board letter say?

A: The source does not show. Counsel said this response clarified a prior letter but did not identify or reproduce it.

Citations and references

• California Revenue and Taxation Code §§ 6006.5 and 6018
• March 30 request and prior Board letter — referenced but not included; the request year is not stated
• Professional, patient-glasses, equipment-use, taxable-merchandise, permit, sale, tax, administrative, and outcome records — described or implicated but not included

Verbatim support

From the official April 28, 1953 Tax Counsel letter:

A person who is the consumer under Section 6018 is not regarded as selling tangible personal property and, accordingly, the sale of his equipment could be exempt under Section 6006.5 as a sale of property not held or used in the course of an activity for which a seller's permit is required.

Apparently the oculist or optometrist on behalf of whom you made your inquiry sells sun glasses and miscellaneous items with respect to which he is required to pay the sales tax.

Any equipment or fixtures held or used in connection with the activity of selling sun glasses or other merchandise which is not covered by Section 6018 would be equipment held or used in an activity requiring a seller's permit, and the sale of that equipment could not, therefore, be exempt as an occasional sale.

We trust that this clarifies our prior letter.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 395.0280
• Original supporting opinion: 395.0280 PDF

Original ruling text

395.0280

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

April 28, 1953

Mr. V. D--Public Accountant
XXXX --- Boulevard
--- --- XX, California
Dear Mr. D---:
In your letter of March 30 you inquire concerning the application of the sales tax with respect to sales of optical equipment and fixtures by a person who uses the property in grinding lenses and in dispensing glasses “when the glasses themselves are not taxable when sold to the patient”. You apparently refer to an oculist or optometrist furnishing glasses to a patient but who is the consumer thereof under Section 6018 of the Sales and Use Tax Law. A person who is the consumer under Section 6018 is not regarded as selling tangible personal property and, accordingly, the sale of his equipment could be exempt under Section 6006.5 as a sale of property not held or used in the course of an activity for which a seller’s permit is required. Apparently the oculist or optometrist on behalf of whom you made your inquiry sells sun glasses and miscellaneous items with respect to which he is required to pay the sales tax. Any equipment or fixtures held or used in connection with the activity of selling sun glasses or other merchandise which is not covered by Section 6018 would be equipment held or used in an activity requiring a seller’s permit, and the sale of that equipment could not, therefore, be exempt as an occasional sale. We trust that this clarifies our prior letter. Very truly yours,

E. H. Stetson
Tax Counsel

EHS:ph
cc:

Los Angeles – Tax Administrator