Could a taxable generic survey report become nontaxable by binding and delivering it together with a separately ordered custom report?
Apply this to your situation
This page answers the general question as of 1992. Ask about yours and see what current California tax law says, with citations.
Plain-English summary
A company sold duplicate copies of a generic report and also prepared custom reports. California treated the generic report copies as taxable tangible personal property and the custom-report charges as nontaxable.
A customer could contract for both and receive them together in one binder, but that physical integration did not change the result. The generic report remained a separate taxable sale even when delivered as one unit with the custom report.
What this means for you
Research and report businesses
Standardized inventory reports and newly prepared custom work can retain different tax treatment in the same customer engagement.
Accountants and tax professionals
Preserve separate contract terms, pricing, product identity, customization work, and delivery format instead of assuming one binder creates one tax result.
Common questions
Q: Were copies of the generic report taxable?
A: Yes.
Q: Was the custom report taxable?
A: No, under the source's stated treatment.
Q: Did binding both reports together make the whole transfer nontaxable?
A: No. The generic report remained taxable.
Citations and references
- California Revenue and Taxation Code § 6006(a)
Source
- Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
- Annotation page: Annotation 515.0230
- Original supporting opinion: 515.0230 PDF
Original ruling text
515.0230
STATE OF CALIFORNIA
STATE BOARD OF EQUALIZATION
WILLIAM M. BENNETT
First District, Kentfield
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-6540
BRAD SHERMAN
Second District, Los Angeles
ERNEST J. DRONENBURG, JR.
Third District, San Diego
September 11, 1992
MATTHEW K. FONG
Fourth District, Los Angeles
GRAY DAVIS
Controller, Sacramento
Mr. D--- B. Y--Managing Vice President
R--- A--XXXX North ---- Street, Suite XXX
--- ---, CA XXXXX
BURTON W. OLIVER
Executive Director
SR -- XX-XXXXXX
Dear Mr. Y---:
Your June 8, 1992 letter to Mr. Garth Keel of the State Board of Equalization's San Jose District office has been referred to the legal staff for reply. Your letter concerns the application of sales tax to charges for copies of a survey. We understand you produce generic reports, duplicate copies of which you sell. You also prepare custom reports. The Board's staff has determined that, although tax does not apply to your charges for the custom reports, tax does apply to your sales of the copies of the generic report, titled "P--- B--- Report." You asked whether you could integrate the "P--- B--- Report" with the custom portion of a report in one binder and make a nontaxable transfer of the two surveys. No, under Revenue and Taxation Code section 6006, subdivision (a), a "sale" is a transfer of title or possession in any manner or by any means of tangible personal property for a consideration. When a customer contracts to purchase both a "P--- B--- Report" and contracts for you to prepare a customized report, tax applies to the sale of the "P--- B--- Report" regardless that you may deliver it combined with the custom survey as one unit. We hope this answers your question; however, if you need further information, feel free to write directly to this office. Very truly yours,
Ronald L. Dick
Senior Tax Counsel
What does the law say today, for your facts?
This ruling is from 1992. 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