Ezel / Tax Rulings / CA

Could a concrete-pipe manufacturer buy Hydropel waterproofing compound for resale?

Short answer Yes, when used to manufacture pipe sold to customers. The testing-lab information showed Hydropel was bought for incorporation into the concrete product.
State
CA
Ruling
Annotation 440.3020
Tax type
Sales and Use Tax
Issued
1978-08-01
Issued by
California State Board of Equalization
Requested by
Board staff asking about Hydropel waterproofing compound used in concrete pipe
Topics
waterproofing ingredient component parts manufacturing resale exemption
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1978. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1978
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 legal memorandum dated August 1, 1978, published by CDTFA as support for an annotation carrying March 20, 1950 metadata; the source-document date is used here. It relies on information obtained from the Division of Highways testing laboratory about Hydropel's incorporation into concrete pipe. Another taxpayer should not treat it as binding and should check current concrete, waterproofing, ingredient, 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

Board staff confirmed that Hydropel was a proprietary waterproofing compound used in manufacturing concrete pipe.

When the pipe was sold, Hydropel qualified for resale because the manufacturer bought it for incorporation into the concrete product.

The file note says the supporting information came from the Division of Highways testing laboratory. CDTFA's annotation metadata dates the proposition March 20, 1950, but the complete supporting memorandum is dated August 1, 1978; this page uses the source-document date.

Source

Original ruling text

State of California

Board of Equalization

Memorandum

440.3020

August 1, 1978

To:

Mr. H. B. Hoffman (CWH)

From:

E. H. Stetson (WAP)
l

Subject:

F--- S--dba E--- S--- C--- P--- Co.
--- S. --- St.
---

X-XXXXX

This is in answer to your inquiry concerning the application of tax to the sale of hydropel. Our information confirms that this product is a proprietary water-proofing compound. Where it is used in the manufacture of concrete pipe, it appears that it is purchased for the purpose of incorporating it into the manufactured article sold. Accordingly, if the concrete pipe is sold, tax does not apply to the sale of the hydropel to the manufacturer.

EHS:WAP:HB

File note:

The above information was secured from the testing lab of Division of Highways.

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