Which color-film developers did the complete opinion treat as incorporated into sold positives or prints?

Plain-English summary

After a hearing, legal staff sent Dr. C. Robert Hurley a developer list, its hearing report, and taxpayer-supplied literature, asking which chemicals or constituents remained in sold positives or prints. The list printed Kodak Film Developer SD-35, SD-39 on one line, followed by Printon Anscochrome Color Developer, Anscochrome Film Color Developer, Ektachrome Film Developer SD-34, and Ektacolor Paper Developer SD-41.

Hurley's missing report, as summarized in the opinion, said CD-3 and citrazinic acid from SD-35 became incorporated while all its other constituents or reaction products washed out. It said no constituents of SD-34 remained in the colored film after processing. The supplied references did not give the other developers' composition; Hurley said chemicals similar to SD-35 should be treated similarly.

The opinion therefore allowed resale treatment only for the portion of SD-35 used to develop positives and prints. It treated SD-34 as consumed and taxable. For SD-39 and the other listed developers, the record did not adequately explain constituents or use, so the opinion said tax should be redetermined without change. The PDF supplies no later order or final Board action.

Live annotation and source posture

CDTFA's live Annotation 420.0480 says Kodak Film Developer SD-35 and Ektachrome Film Developer SD-39 become incorporated in the finished product and are exempt. The complete opinion does not reach that result. It identifies Ektachrome Film Developer SD-34, not SD-39, as consumed and taxable; limits SD-35 resale treatment to the portion used for positives and prints; and leaves SD-39 and other developers unchanged because the evidence did not adequately show their composition or use. The live text also omits CD-3, citrazinic acid, washed-out constituents, the hearing and expert posture, and the evidentiary failure.

The source's label Ektacolor Paper Developer, SD-41 was verified visually because the default extraction renders the final digit as lowercase l. The original-text section remains byte-exact and therefore preserves that extraction rather than silently changing it.

The supporting PDF supplies no petition, taxpayer or staff identity, filing date, tax period, assessment or refund amount, hearing date or transcript, developer quantities or purchase invoices, use allocation, chemical formulas, taxpayer literature, complete hearing report, Hurley report, laboratory result, Photo Chemistry edition or page, redetermination computation, later order or final Board action. The opinion's account supports its stated distinctions but does not make the underlying technical evidence independently reviewable.

CDTFA's Annotated Legal Opinions collection says source materials are summarized as annotations and that statutory law controls whenever a statute and annotation conflict. The official two-page PDF has a clean native text layer and one small page-one letterhead stencil rather than scanned text, so no OCR was required. Both fresh direct PDF downloads and both live-page downloads were byte-identical, duplicate default PDF text extractions matched, and the source tail matched the fresh extraction after removal of only the extractor's terminal newline and form feed.

What this means for you

Identify each developer precisely and substantiate both its constituents and actual use. A product name alone did not establish component-part treatment here, and even SD-35 qualified only to the extent used for sold positives and prints.

Common questions

Q: Did the complete opinion exempt SD-39?

A: No. SD-39 appeared on the submitted list, but staff said only SD-35 and SD-34 could be ruled upon because the other developers lacked adequate constituent and use evidence.

Q: Which SD-35 constituents remained in the finished product?

A: The opinion summarizes Hurley's report as identifying CD-3 and citrazinic acid; other constituents or reaction products washed out.

Q: Was every SD-35 purchase for resale?

A: No. Only the portion used to develop positives and prints could be considered for resale.

Q: What was the treatment of SD-34?

A: Its constituents did not remain in the colored film after processing, so purchases were for consumption and taxable.

Q: Does the PDF show the final Board outcome?

A: No. It contains the legal opinion's no-change redetermination view, not a later order or final action.

Citations and references

• Petition and hearing on chemicals used to develop color film and make positives and prints — described but absent
• Hearing report, taxpayer literature and developer list sent to Dr. C. Robert Hurley — only the list is reproduced in the opinion
• Dr. Hurley's attached technical report — summarized but absent
• George T. Eaton, Photo Chemistry — cited without edition, publisher, page or reproduced text
• Chemical purchase, composition and use records; audit, redetermination and final action — implicated but absent

Verbatim support

From the official March 21, 1960 legal opinion:

As indicated therein, it is his opinion that the only constituents of SD-35 which became incorporated in the finished product were CD-3 and Citrazinic Acid (according to Photo Chemistry, George T. Eaton). All other constituents or their reaction products are washed out.

The composition of the other developers were not given in any of the references supplied to Dr. Hurley.

Since SD-34 does not become a component part of product which is sold, sales thereof to X------------------------- are for consumption and taxable.

The only portion of SD-35 to X----------------------- which can be considered as for resale is that portion which is used for developing positives and prints.

As for the rest of the chemicals, since no adequate explanation as to the constituents or use was elicited from the taxpayer at the hearing, it is my opinion that tax should be redetermined with respect to them without change.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation containing the conflicting summary: Annotation 420.0480
• Original supporting opinion: 420.0480 PDF

Original ruling text

STATE OF CALIFORNIA

420.0480

STATE BOARD OF EQUALIZATION

Place: Sacramento
Date: March 21, 1960
To: Mr. E. H. Stetson
From: X----------------Re: X-------------------A hearing was held on a petition for redetermination involving the question of application of tax to chemicals used by the above-named taxpayer in developing color films and making color positives and prints. Taxpayer asserted that sales of certain chemicals to him should be exempt from tax inasmuch as, he claimed, their constituents became incorporated in products which they sold. We submitted the list of chemicals to Dr. C. Robert Hurley, along with our hearing report and literature supplied by taxpayer for an opinion as to whether the chemicals or their constituents became incorporated in positives or prints which were sold by taxpayer. The chemicals were: Kodak Film Developer, SD-35, SD-39 Printon Anscochrome Color Developer Anscochrome Film Color Developer Ektachrome Film Developer, SD-34 Ektacolor Paper Developer, SD-4l Attached is Dr. Hurley's report. As indicated therein, it is his opinion that the only constituents of SD-35 which became incorporated in the finished product were CD-3 and Citrazinic Acid (according to Photo Chemistry, George T. Eaton). All other constituents or their reaction products are washed out. It is his opinion that none of the constituents of such first/developer, as X--------SD-34, remained in the colored film after processing. The composition of the other developers were not given in any of the references supplied to Dr. Hurley. His conclusions with respect to such chemicals was that if they were similar to SD-35 they should be treated similarly. On the bas is of the foregoing and Mr. X----------’s hearing report, it is my opinion that the only chemicals that can be ruled upon are Kodak Film Developer SD-35

and Ektachrome Film Developer SD-34. Since SD-34 does not become a component part of product which is sold, sales thereof to X------------------------- are for consumption and taxable. The only portion of SD-35 to X----------------------- which can be considered as for resale is that portion which is used for developing positives and prints. As for the rest of the chemicals, since no adequate explanation as to the constituents or use was elicited from the taxpayer at the hearing, it is my opinion that tax should be redetermined with respect to them without change.

GAT:o’b