Which library-preparation services were nontaxable professional work and which were taxable mechanical processing?

Plain-English summary

Bibliographic description for classification, assigning or verifying Library of Congress classification numbers, and inspecting or verifying book cards, pocket labels, and catalog cards were nontaxable professional library services.

Applying classification labels and card pockets and stamping a college name in a book were taxable mechanical processing under sections 6006 and 6012, as cited.

The provider had to segregate taxable and nontaxable contract receipts in its records to claim a deduction for the professional-service portion.

Citations and references

• California Revenue and Taxation Code sections 6006 and 6012 (as cited; the PDF prints the subdivision after 6006 ambiguously)

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/435-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/435-1020.pdf

Original ruling text

STATE OF CALIFORNIA

435.1020

STATE BOARD OF EQUALIZATION

December 4, 1964

Dear Mr. X------------------,
I regret the delay in responding to your letter of August 24, 1964. It appears from the information contained therein and its enclosures that the items listed in the letter of X-------, Business Manager, as follows: “a.

Bibliographical description of the book for classification purposes.

b.

Assignment of, or verification of, the Library of Congress classification number to each book.

c.

Inspection and verification of book card, pocket label and Library of Congress catalogue cards.”

constitute nontaxable professional library services.
Item (d), “Application of classification label, card pocket and college name stamped in book,” appears, however, to be a mechanical processing which we believe is included within the definition of "sale" in section 6006(0) of the Sales and Use Tax Law, and the price paid therefor as included within the definition of "gross receipts" in section 6012. There must be a segregation made in the records of the X--------------- of its receipts from the taxable and nontaxable portions of its contracts in order for the company to claim a deduction for the nontaxable portion of its receipts. Very truly yours,

E. H. Stetson
Tax Counsel
EHS:fb
cc:

Inglewood - Subdistrict Administrator
New York District Administrator