Ezel / Tax Rulings / CA

Could a magnetic-tape maker buy methyl ethyl ketone, methyl isobutyl ketone, and trichloroethane for resale?

Short answer No. The ketones applied the oxide coating and trichloroethane thinned its lubricant, so all three were taxable manufacturing solvents.
State
CA
Ruling
Annotation 440.0140
Tax type
Sales and Use Tax
Issued
1966-11-15
Issued by
California State Board of Equalization
Requested by
Board district audit staff asking about three solvents used in manufacturing magnetic tape
Topics
magnetic tapes solvent lubricants manufacturing aid
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1966. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1966
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 memorandum dated November 15, 1966, published by CDTFA as support for a sales and use tax annotation. It applies the stated solvent functions in magnetic-tape manufacture without describing residue or later product effects. Another taxpayer should not treat it as binding and should check current magnetic-tape, solvent, coating, lubricant, manufacturing-aid, 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 magnetic-tape manufacturer used methyl ethyl ketone and methyl isobutyl ketone as flammable solvents to apply the tape's oxide coating. It used trichloroethane as a nonflammable solvent to thin the lubricant applied to that coating.

Board counsel classified all three as taxable manufacturing aids. The source describes their role as solvents in applying or thinning production materials and provides no facts showing that the solvents themselves became beneficial components of the sold magnetic tape.

Source

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Los Angeles District
District Principal Auditor (JTQ)

From:

Tax Counsel (GAT) - Headquarters

Subject:

M--XXXX --- ----- ---, Ca. XXXXX

440.0140

Date:

November 15, 1966

S- -- XX XXXXXX

Your memo of November 2, 1966, addressed to H. A. Dickson, Principal Auditor, has been referred to the legal staff for reply. It is our understanding that both Methyl Ethyl and Methyl Isobutyl ketones are flammable liquid compounds commonly used in manufacturing as solvents. It is further our understanding that Trichlorethane (C2H3Cl3) is a designation of either of two non-flammable liquid isomeric compounds, CH3CCL3, a parent compound of certain insecticides, and CH2CLCHCl2, used chiefly as a solvent. The explanation of the functions and uses of these compounds in the taxpayer’s manufacturing operations indicates that they are used as solvents, the first two for applying the oxide coating to magnetic tape, and the third for thinning the lubricant which is applied to the oxide coating. It is, therefore, our opinion that Methyl Ethyl and Methyl Isobutyl ketones and Trichlorethane, used in manufacturing magnetic tape, are purchased for use as manufacturing aids.

GAT:kc
cc:

--- --- – Subdistrict Administrator

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