Ezel / Tax Rulings / CA

Which work on customer stones was taxable fabrication and which was nontaxable inspection, minor modification, or used-ring work?

Short answer Drilling, finishing rough stones, and first-time ring mounting were taxable. Inspection cuts, minor redrilling, and mounting in previously used stone rings were not.
State
CA
Ruling
Annotation 435.1620
Tax type
Sales and Use Tax
Issued
1950-10-18
Issued by
California State Board of Equalization
Requested by
A stone or jewelry business asking about drilling, cutting, finishing, and mounting consumer-owned stones
Topics
stone drilling mounting fabrication labor repair labor
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1950. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1950
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 tax-counsel letter dated October 18, 1950, published by CDTFA as support for a sales and use tax annotation. It assumes taxable examples are performed for consumers rather than regular-course resellers and makes fine distinctions among first-time work, inspection, and minor modification. Another taxpayer should not treat it as binding and should check current stone, gemstone, jewelry, mounting, fabrication, repair, resale, 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

Tax applied to drilling holes in stones, mounting stones in rings that had never held stones, and processing rough stones into finished products.

Tax did not apply to cutting or slabbing rough stones only for inspection, making minor hole-size changes by redrilling, or mounting stones in used rings that had previously held stones.

The taxable examples assumed the customer was the consumer and did not intend to resell the processed article in the regular course of business. Ruling 15 supplied the cited basis.

Citations and references

  • California Sales and Use Tax Ruling 15 (as cited)

Source

Original ruling text

435.1620

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

October 18, 1950

Gentlemen:
This is to confirm our opinion expressed at our discussion in this office today that the sales tax applies to charges for: 1.

Drilling holes in stones.

2.
Mounting stones in rings not previously having had stones mounted therein. 3.

Processing rough stones into finished products.

Tax does not apply to charges for:
1.

Cutting or slabbing of rough stones for inspection purposes only.

2.
hole.

Redrilling of stones in order to make minor modifications in the size of the

3.
Mounting stones in used rings previously having had stones mounted therein. It is understood that in those cases above indicated in which the tax applies the customer is the consumer and does not intend to resell the processed article in the regular course of business. The basis for the foregoing opinion is found in Sales and Use Tax Ruling 15, copy enclosed, which quotes the pertinent provision of the Sales and Use Tax Law upon which it is based. Very truly yours,

E. H. Stetson
Tax Counsel
EHS:ph

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