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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
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345.0000 Manufacturers of Personal Property—Regulation 1524
Annotation 345.0003
345.0003 Applying Teflon Coating to New and Used Equipment. Taxpayer is in the business of applying Teflon coating at its place of business in California to new and used equipment furnished by its customers. Taxpayer is performing fabrication when it applies the Teflon to new equipment, and tax applies to the taxpayer's total charge unless the sale is otherwise exempt.
Taxpayer is repairing or reconditioning property when it applies Teflon to the used equipment of its customers. Thus, taxpayer is the consumer of the Teflon it furnishes in such operations if the retail value of the Teflon (and any other materials furnished) is 10 percent or less of taxpayer's lump-sum charge. If such is the case, tax applies to the sale to or use by taxpayer of the Teflon (and other materials). If, however, the taxpayer separately states its charges for the Teflon (and any other materials) regardless of its retail value or if its value exceeds 10 percent of the taxpayer's total charge, the taxpayer is the retailer of the Teflon and other materials it furnishes. If such is the case, tax applies to taxpayer's separately stated charge (or if not separately stated, the fair retail value) for such property unless the sale is exempt from tax. 6/26/97.