Ezel / Tax Rulings / CA

Did solvent evaporation have different tax results when a tire maker bought solvent separately versus buying rubber cement containing solvent?

Short answer Yes. Separately bought solvent was taxable because it evaporated, but purchased rubber cement qualified as the article resold despite loss of its solvent content.
State
CA
Ruling
Annotation 440.0225
Tax type
Sales and Use Tax
Issued
1947-02-04
Issued by
California State Board of Equalization
Requested by
Board staff asking about solvent bought separately or as part of rubber cement used to manufacture tires
Topics
tires solvent evaporation separate purchase component parts resale exemption
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1947. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1947
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 memorandum dated February 4, 1947, published by CDTFA as support for a sales and use tax annotation. It distinguishes the identity of the property purchased: solvent bought separately versus rubber cement bought as a complete article for tire manufacture. Another taxpayer should not treat it as binding and should check current tire, rubber-cement, solvent, evaporation, component-part, 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

A tire manufacturer could either buy solvent and use it to make rubber cement, or buy completed rubber cement that already contained solvent.

Separately purchased solvent was taxable because it evaporated before the tires were sold and therefore was bought for a purpose other than resale.

Purchased rubber cement received different treatment. The manufacturer bought the rubber cement as the article to be incorporated and resold, not its solvent as a separate item. Evaporation of the solvent content did not require taxing the corresponding lost portion of the rubber-cement purchase.

Source

Original ruling text

State of California

Memorandum

Board of Equalization

440.0225
Sacramento, California
February 4, 1947

To:

Mr. Wm. R. Thomson (PER)

From:

E. H. Stetson

Subject:

Purchases of Tangible Personal Property
made for Resale but subsequently Consumed

We concur with your views as expressed in your memo of January 22 on the taxability of purchases of solvent by a rubber company, which solvent is used in the manufacture of tires, the solvent, however, being entirely lost by evaporation before the tires are sold. Since the solvent evaporates before the tires are sold, it seems that it must be regarded as purchased for a purpose other than resale. Where rubber cement is purchased, we do not think that the loss of the solvent contained therein requires the application of the tax to the amount of the loss. It is not solvent that is purchased, but rubber cement, and this article is purchased for the purpose of resale, and is resold, even though the solvent contained therein may first evaporate.

EHS:bo

What does the law say today, for your facts?

This ruling is from 1947. Ezel checks current California tax law against your situation and cites the authority it relies on.

Opens in Ezel Pro.

  • Checks the law as it stands today, not only this page
  • Cites every source it relies on, so you can verify it
  • Chat, drafting and research in one workspace