Was benzol sold for ceramic-industry use a resold ingredient or a taxable cleaner?

Plain-English summary

A chemical seller asked about benzol used in the ceramic industry. On the limited information supplied, Board counsel understood benzol to function as a solvent or cleaner used on the product without becoming part of the finished ceramic article.

Sales for that use were therefore taxable under the cited manufacturing-property rule. The letter invited further analysis of the exact chemical reaction and the result of adding benzol, so the conclusion was not presented as final against different technical evidence.

The same official July 17, 1956 letter also supports Annotation 440.0075 on acetone and Annotation 440.0109 on metal cyanide salts used in electroplating.

Citations and references

• California Sales and Use Tax Ruling 14 (as cited)

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/440-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/440-0103.pdf

Original ruling text

440.0103

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

July 17, 1956

L. H. B--- Co.
XXth and --- Streets
--- --- X, California

Attention:

Mr. A. E. N---

Gentlemen:
We regret the delay in replying to your inquiries of January 11, April 13 and April 17, 1956, concerning the taxability of sales of Acetone and Benzol to be used in the ceramic industry. Our understanding of chemicals Acetone and Benzol is that they are acids generally used as solvents or cleaners. We have not previously ruled on either of these chemicals, but it would be our opinion that as cleaners they would be used on but not become a part of the finished product in such a way as to be exempt as provided for in Sales and Use Tax Ruling 14, copy enclosed. We would be glad to consider any further analysis you might care to submit as to the exact chemical reaction caused by these chemicals and as to the result of adding them to the products. You also inquire concerning the taxability of mineral oil sold to M--- S--- Hospital. The hospital claims that the mineral oil is used for feeding. It is our opinion that mineral oil is not a food product even though it is used for human consumption. We understand that it has not nutritional value to humans because it cannot be broken down by the digestive system. We believe that its uses for human consumption are for medicinal purposes and it is therefore taxable. Finally, you ask about silver cyanide, copper cyanide, zinc cyanide and other metal salts used in electroplating. We at one time were of the opinion that these salts were primarily manufacturing aids to conduct the metal ions from the cathode to the anode. Upon reconsidering

L. H. B--- Co.

-2-

July 17, 1956
440.0103

the question, we became of the opinion that the fact that ions in the metallic salt do become plated on the finished product should be considered controlling. The metallic salts may therefore be purchased by the plater for resale. Very truly yours,

Bill Holden
Associate Tax Counsel

JJD:tl

cc:

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