Ezel / Tax Rulings / TX
TX 8506L0644A10 Sales and/or Use Tax (State,Local,MTA) 1985-06-05

Was bulk material used to make short-lived prototype patterns exempt from Texas sales tax?

Short answer: No. The bulk material was taxable because the prototype patterns were not directly used in manufacturing and did not qualify for exemption, even though an accurate prototype led to creation of a permanent mold.

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This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1985
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 an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
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) is the authoritative source for any reliance.

Plain-English summary

The requester used bulk material to make prototype patterns that lasted two to three weeks. If a prototype's dimensions were accurate, a permanent mold was then made.

The Comptroller ruled that the bulk material was taxable. The prototype patterns were not directly used in the manufacturing process and therefore did not qualify for exemption.

Common questions

Did the prototype's short life create an exemption? No. Did its role in checking dimensions qualify as direct manufacturing use? No under the stated facts. Was the bulk material taxable? Yes.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

June 5, 1985

Dear ***:

Thank you for your recent letter regarding bulk material used to make
prototype patterns. The patterns have a life expectancy of 2 to 3
weeks. If the dimensions are accurate, a permanent mold is made.

The bulk material is taxable. The prototype patterns are not directly
used in the manufacturing process and do not qualify for exemption.

This opinion is based on the facts presented. If there are additional
or different facts, the opinion may change.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division

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