Could a business buy ammonia for resale when the chemical became incorporated into diazotype prints that it sold?

Plain-English summary

The taxpayer used a dry-development, or ammonia-development, process to make diazotype prints. Sensitized paper was exposed to ultraviolet light through a translucent master and then passed through aqua-ammonia vapor.

The ammonia combined with the acidic stabilizer on the paper, allowing the remaining diazonium salt and coupler to form the dye image. The memorandum found that the ammonia became incorporated into the processed print's surface.

Because the finished diazotype prints were sold and staff treated the ammonia as part of them, the memorandum characterized ammonia sales for that use as sales for resale.

Live annotation and source posture

The current live annotation preserves the dry- or ammonia-developing process, sensitized paper, ultraviolet exposure through a master, aqua-ammonia vapor, acidic stabilizer, unexposed diazonium salt, coupler, dye image, sold prints, resale conclusion and December 9, 1964 date. It omits the missing November 27 request, staff's It is our understanding qualification, free-nitrogen and colorless-compound step, neutral-ammonia-salt statement, absence of cited authority, and lack of an applied transaction or audit outcome.

The official PDF visibly prints two apparent errors: Ammonia thus utilized becomes incorporated in the surface or the processed diazotype print and sales tor resale. The live annotation supplies a polished summary but does not identify these textual issues. This page reports the intended-seeming component-part result in plain language while preserving and disclosing the exact official text below rather than rewriting it.

The supporting PDF supplies no copy or year of the November 27 memorandum, taxpayer identity, process diagram, paper specification, diazonium salt, coupler, stabilizer or ammonia identity or quantity, chemical analysis, test result, proof of incorporation, purchase invoice, resale certificate, print, customer sale, tax filing, audit workpaper, assessment, refund or later outcome. It cites no statute, regulation, ruling, case or technical source. The conclusion is therefore a one-page staff application of reported chemistry, not independently reviewable process evidence.

CDTFA's Annotated Legal Opinions collection says memoranda are summarized as annotations and that statutory law controls whenever a statute and annotation conflict. The official PDF has a clean native text layer and no embedded raster image, so no OCR was required; its apparent errors were confirmed visually rather than inferred from extraction alone. Both fresh direct PDF downloads and both live-page downloads were byte-identical, duplicate default PDF text extractions matched, and the original-text section remains byte-identical to its committed version and the fresh extraction after removal of only the extractor's terminal newline and form feed.

What this means for you

Substantiate the exact chemistry and the ammonia that remains in the property sold rather than relying only on the process label. The source's result turns on incorporation into sold diazotype prints, but it provides no underlying composition, test, purchase or sales evidence.

Common questions

Q: What role did ammonia play in the described process?

A: It combined with the acidic stabilizer to form a neutral ammonia salt, enabling unexposed diazonium salt to combine with the coupler and form the dye image.

Q: Did staff treat the ammonia as part of the sold print?

A: Yes, although the official sentence visibly prints surface or the processed diazotype print rather than the expected preposition.

Q: Did the memorandum cite a chemistry report or tax authority?

A: No. It cites neither legal nor technical authority and does not reproduce the November 27 request.

Q: Did it decide a documented audit amount?

A: No. The taxpayer, purchases, print sales, audit measure and later outcome are absent.

Citations and references

• November 27 San Jose Auditing memorandum — described but absent, with no year printed
• Diazotype paper, chemicals, process evidence, incorporation test, ammonia purchases, print sales, audit and outcome — implicated but absent
• No statute, regulation, ruling, case or technical source — cited in the supporting memorandum

Verbatim support

From the official December 9, 1964 Tax Counsel memorandum:

It is our understanding that taxpayer utilizes the "dry-developing" or "ammonia-developing" process for making diazotype prints.

The ammonia combines with the acidic stabilizer, forming a neutral ammonia salt, enabling the unexposed Diazonium salt to combine with the coupler to form a dye image.

Ammonia thus utilized becomes incorporated in the surface or the processed diazotype print.

In view of the foregoing, it is our opinion that sales of ammonia for use in dry-developing diazotype prints which are sold, are sales tor resale.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation: Annotation 420.0540
• Original supporting opinion: 420.0540 PDF

Original ruling text

State of California

Board of Equalization

Memorandum

To:

San Jose – Auditing (SE:JPO)

From:

Tax Counsel (GAT) – Headquarters

Subject:

X-----------------

420.0540

Date:

December 9, 1964

This is in reply to your memo of November 27, regarding the application of tax with respect to ammonia purchased by taxpayer for use in processing diazotype prints. It is our understanding that taxpayer utilizes the "dry-developing" or "ammoniadeveloping" process for making diazotype prints. This process involves the use of paper sensitized with a Diazonium salt, a coupler and an acidic stabilizer. When the sensitized surface is exposed to ultra-violet light through a translucent master print, the exposed Diazonium salt is decomposed, releasing free nitrogen, forming a chemically-inert colorless compound. The exposed paper is passed through an aqua ammonia vapor. The ammonia combines with the acidic stabilizer, forming a neutral ammonia salt, enabling the unexposed Diazonium salt to combine with the coupler to form a dye image. Ammonia thus utilized becomes incorporated in the surface or the processed diazotype print. In view of the foregoing, it is our opinion that sales of ammonia for use in dry-developing diazotype prints which are sold, are sales tor resale.

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