Ezel / Tax Rulings / CA

Could a taxpayer deduct quilting charges from gross receipts as nontaxable labor?

Short answer No. Based on the limited facts, quilting was a step in producing, fabricating, or processing tangible personal property, so the charges remained in gross receipts.
State
CA
Ruling
Annotation 435.1300
Tax type
Sales and Use Tax
Issued
1951-11-01
Issued by
California State Board of Equalization
Requested by
Board staff reviewing a taxpayer's deduction of quilting charges from gross receipts
Topics
textiles gross receipts fabrication labor processing
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1951. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1951
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is a California State Board of Equalization staff memorandum dated November 1, 1951, published by CDTFA as support for a sales and use tax annotation. The source expressly says its conclusion was based on limited knowledge of quilting and gives no detailed facts, materials, or resale analysis. Another taxpayer should not treat it as binding and should check current quilting, textile, manufacturing, fabrication, gross-receipts, and sales-and-use-tax rules. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

A taxpayer deducted quilting charges from gross receipts. Based on the Board staff's limited understanding of the activity, quilting was a step in producing, fabricating, or processing tangible personal property.

The charges therefore could not be deducted from taxable gross receipts. The short memorandum supplied no additional facts or authority.

Citations and references

  • No numbered statute or regulation was cited in the source memorandum.

Source

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Mr. X----------------- (LJM)

From:

R. G. Hamlin

Subject:

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

435.1300

Date:

November 1, 1951

You have inquired whether a deduction taken by this taxpayer for quilting charges is proper.
Based on our limited knowledge of quilting it is our conclusion that it constitutes a step in the
producing, fabricating, or processing of tangible personal property. Accordingly, in our opinion,
charges for quilting should not be deducted from the taxpayer's gross receipts.

RGH:ja

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