Were tank-calibration charges taxable when the customer received a written report, and what if the work produced a gauge stick or monthly oil-field map?

Plain-English summary

California treated charges for calibrating tanks as nontaxable when the customer received a written report like the sample submitted with the request.

When calibration was performed to furnish a gauge stick or other tangible personal property, the entire charge was taxable. Labor used to make the necessary computations could not be deducted.

The source also reviewed a monthly oil-field map. It concluded that the map lacked the ordinary characteristics of a newspaper or periodical and therefore did not qualify for the referenced exemption.

What this means for you

Calibration, measurement, and mapping businesses

A written report incidental to calibration was treated differently from producing a physical measuring tool or selling a map publication.

Accountants and tax professionals

Document the customer's primary objective, reports, gauge sticks or instruments, computation labor, map format, publication frequency, and separately stated charges.

Common questions

Q: Was tank calibration with a written report taxable?

A: No.

Q: Was calibration performed to furnish a gauge stick taxable?

A: Yes, without a labor deduction.

Q: Were the monthly oil-field maps exempt periodicals?

A: No.

Citations and references

• Sales and Use Tax Ruling 50 (referenced in the source)

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 515.0400
• Original supporting opinion: 515.0400 PDF

Original ruling text

515.0400

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

February 13, 1951

Mr. C. P. S--XXX East --- Street
--- --- X, California
Dear Sir:
This is in answer to your letter of November 29 with respect to the application of the State sales tax to a client’s charge for calibrating tanks and to sales of oil field maps which are published at monthly intervals. It is our opinion that the tax does not apply to your client’s charges for calibrating tanks although a written report, of the type forwarded to us, is furnished to the customer. On the other hand, if the calibrations are made for the purpose of furnishing a guage stick or other tangible personal property, it is our opinion that the tax applies to your client’s charge without deduction on account of the labor involved in making the necessary computations. Our examination of the map of the G--- H--- oil field which you forwarded with your letter leads us to the conclusion that the sales of such maps are not exempt as sales of newspapers or periodicals, within the meaning if Sales and Use Tax Ruling 50, copy enclosed. This is for the reason that the map does not have any of the ordinary characteristics of a newspaper or periodical. Very truly yours,

R. G. Hamlin
Associate Tax Counsel

RGH:HB
cc:

W. R. Thomson