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Business Taxes Law Guide—Revision 2024

BTLG Table of Contents > Sales and Use Tax Annotations > M > 360.0000 Miscellaneous Service Enterprises > entire section

Sales and Use Tax Annotations


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360.0000 Miscellaneous Service Enterprises—Regulation 1506

360.0000 Miscellaneous Service Enterprises—Regulation 1506

See also Service Enterprises Generally.

360.0007 Appliance Items Dispensed by Dentist. A dentist will be dispensing items such as water irrigation devices for the treatment of chronic periodontal conditions, prescription-strength fluoride mouthrinse for hypersensitive teeth, irrigating syringes for post extraction osteitis, and the like.

If the dentist includes the cost of the items which he sells in the total amount billed to the patient, the dentist will be considered the consumer of the items. Tax, accordingly, applies to the sale of the items to the dentist. If the dentist charges separately for the items, he will be regarded as selling them at retail and must obtain a permit and pay sales tax on the sales price of the items to patients. Of course, sales of prescription medicines to patients would be exempt under section 6369. 4/4/91.

360.0015 Community Youth Center. A private nonprofit community youth center, in cooperation with the county schools offers a vocational food service training class. As part of the class, students prepare and serve hot lunches, cafeteria style, which are purchased by students and some instructors at the high school next door, which has only a snack bar and serves no hot meals. It was asked whether the center is obligated to pay sales tax on the meals sold by the vocational food service training class.

The private nonprofit community youth center will be considered a school for purposes of applying the tax exemption for sales of meals by schools to students as long as the following conditions are met. The center must conduct (1) regularly scheduled classes, (2) with required attendance, and (3) in charge of qualified instructions. Only those meals sold to students are tax exempt. Any meals sold to teachers, custodians, parents, or any nonstudents are subject to sales tax. 9/8/89.

360.0020 Dental Laboratories, repairing and relining dentures, regarded as consumers of materials used where no separate charge is made for materials. 11/3/50.

360.0040 Dental Supplies—Resale by Dentist. A dentist is the consumer of materials used in performing his services, and tax applies to the sale of such property to the dentist. No additional tax is due when he operates, alone or with the aid of a technician, his own dental laboratory, producing articles, such as inlays or plates, used in his own practice. If the dentist employs the technician to produce appliances for one or more other dentists, he is making taxable sales, the tax being measured by the gross receipts from the sales of the finished products without deduction for the part of the cost attributable to the technician's services. The dentist-seller, who must apply for a seller's permit, may buy the materials under a resale certificate or take a tax-paid purchases resold deduction for the cost of the materials in the products sold to his customers. If a group of dentists engage a technician who conducts an independent dental laboratory (independent contractor), his charges are taxable. If considered an employee working on the separate property of each dentist, each dentist will only pay sales tax reimbursement to the dental supply house from which he buys his materials. 1/18/65.

360.0060 Dentist—Operating Own dental laboratory, is not retailer of plates (etc.) used in performing his services. 2/15/51.

360.0080 Dental Restoration—Plaster Models. Work done by an orthodontic laboratory on plaster models belonging to orthodontists after the orthodontists have used the models and before storage does not constitute fabrication or manufacture of the models, but is a restoration of already used property. 4/17/69.

360.0100 Dry Cleaners. Tax does not apply to charges made by a dry cleaner for cleaning and treating wedding gowns with the Meader Guardian Process. 1/3/63.

360.0102 Gun Clubs Furnishing Ammunition. Gun clubs furnishing ammunition for a specific charge are retailers and must report and pay tax on such sales. On the other hand, clubs that furnish ammunition, along with various other club services, who make only a single lump sum charge for all services and materials rendered, is the consumer of the ammunition and other materials furnished. As such, it must purchase the shells and other materials included in the single charge, (e.g., clay pigeons, blue rocks, or targets), as a consumer, reimbursing their vendors for the tax on the sale. 10/6/47.

360.0105 Hair Weaving. A custom hairpiece is created for a customer consisting of human hair, synthetic hair, or a blend of both. The stylist weaves the hair by attaching the waft (base of the hairpiece) to a thin braid of the customer's natural hair. Such weaving attaches the hairpiece securely to the client. As the customer's hair grows out, the stylist provides periodic maintenance including resecuring the waft to the braid, hair cutting and hair coloring.

The hairpiece is not an expendable appliance make-up but has a lengthy period of usefulness. As such it is tangible personal property and the sale is subject to sales tax; however, there appears to be a substantial amount of labor expended in installing the hairpiece through the weaving process. Therefore, the charge for the installation labor is nontaxable. 10/31/88.

360.0110 Hearing Aids. Assistive listening devices consist of FM receivers fully worn on the body of the hearing impaired and FM transmitters (microphones) fully worn on the body of the person speaking to the hearing impaired. The speaker talks into the transmitter, which sends the sound by FM signal to the receiver, which delivers the sound directly to the ear of the hearing impaired. Such FM transmitters and receivers fully worn on the body are "hearing aids" within section 6018.7. A licensed hearing aid dispenser is the consumer, not the retailer, of such transmitters or receivers. 2/25/88.

360.0112 Licensed Hearing Aid Dispensers. The following items are hearing aids as defined under Regulation 1506(e) and licensed hearing aid dispensers are consumers of these items. Tax does not apply when the dispenser sells or furnishes these items to his or her customer.

  • Wax guard systems
  • Hearing aid domes and eartips

The following items are not "hearing aids" as defined under Regulation 1506(e) and licensed hearing aid dispensers are not consumers of these items. Tax applies when the dispenser sells or furnishes any of these items to his or her customer.

  • Products used to clean or dry hearing aids
  • Battery removal kits
  • Ear wax removal kits
  • Battery testers
  • Telephone ear pads
  • Foam ear plugs
  • Assistive listening devices not worn fully on the body (6/29/16)

360.0117 Holiday Decorations. A company decorates building lobbies for the winter holidays. It installs and decorates the Christmas tree, if one is ordered, and all additional decorations, including wreaths, lights, garland, and other décor. The wreaths are purchased pre-made and then decorated by the company who makes and attaches bows created from ribbon. The decorations are all from the company's inventory and are owned by the company. When the holiday season is over, the company removes all the decorations and returns them to the company's inventory. The company pays sales tax reimbursement to its supplier when purchasing the decorations. The client is not allowed to change the design.

The true object of the contract is the holiday decorations, not merely the design services. Moreover, since the building owner has temporary use of the holiday decorations created by the company, the transaction is considered a lease. Under these facts, there is a substantial change in form between what the company acquires and what it leases to its clients. Thus, even though the company paid sales tax reimbursement when purchasing the property, its leases of that property are continuing sales and purchases, and the company must collect and remit use tax measured by the rentals payable. The measure of the rentals payable includes all charges made by the company for the décor, except for installation charges. (Revenue and Taxation Code sections 6011 (c)(3), 6012 (c)(3).) The company would be entitled to a tax-paid purchases resold deduction for the tax reimbursement it paid, if it made no use of the property except for these taxable leases. 12/05/00. (2001–3).

360.0120 Laundromats. Where a laundromat furnishes soap and bleach and makes an additional charge therefor, taxability of such charge depends on whether the machines are operated by the customer or the operator of the laundromat. If the customer operates, it is a sale to the customer, whereas if the laundromat operator operates the machine, and the customer merely places his clothes therein, a consumption of supplies by the operator occurs, and the taxable sale is the sale to the operator. 6/16/53.

360.0140 Laundry. Towels purchased outside this state by an industrial laundry for use in this state in its towel supply business and to which it retains title are subject to use tax. 2/5/54.

360.0163 Meals Served at Summer Camps. Sales by a caterer to students at a summer camp qualifying as an educational institution do not fall within the exemption provided under section 6363. The exemption is only available when the educational institution itself sells the meals to the students under the circumstances in section 6363. 2/3/67.

360.0165 Meals to Students. A corporation operates a facility out of a former hotel that has been modified to suit its functions. In addition to classrooms and living quarters, the facility contains a lounge, nutrition area, mailroom, program offices, sport store, ballroom, medical area, gym, and exercise rooms for the participants' use. A 13-day and a 26-day program is provided for a lump-sum amount which includes meals provided to the student. As part of the program, participants are provided with a highly structured program of exercise, education, and eating.

There is no definition of a "school" to be found for purpose of the student meal exemption. The regulation refers merely to public or private schools, school districts, and student organizations. Applying the three requisites set forth in Regulation 1506(f), this facility meets the criteria set forth therein: (1) the program includes regularly scheduled classes as shown in published course schedules, (2) attendance at the sessions is required for successful completion of the courses, (3) classes are conducted or led by qualified instructors. Therefore, the facility is a school qualifying for the student meal exemption and no tax is owed on the sale of meals to the participants. 1/21/92.

360.0168 Prescription Refills. Licensed veterinarians are consumer of drugs and medicines which they furnish in the performance of their professional duties and retailers of drugs and medicines which they furnish without performing professional services. Medicines and drugs furnished by the veterinarian as refills without an office visit within one year of an office visit are regarded as consumed by the veterinarian in the course of professional services. If they are furnished more than one-year after an office visit or they are furnished by a person other than a veterinarian, they are regarded as having been sold at retail. 10/13/94.

360.0176 Religious Summer Camps. There are no special or specific exemptions dealing with sales of meals at summer camps operated by religious organizations. The only exemption possibly available is the one equally available to any summer camp operation, contained in Regulation 1506(f). This exemption is limited to meals sold by the camp, and only if the camps qualify as schools and the participants qualify as students, as defined in the regulation. 5/1/72.

360.0180 Rug and Carpet Cleaners. Charges for cleaning rugs and carpets are not subject to tax. The cleaner is the consumer of materials used and sales of such materials to the cleaner are taxable.

Sizing of rugs or carpets, assuming that such operation consists of the application of a starch or glutinous material and does not involve the cutting of a rug or carpet to alter its dimensions, is likewise a service except where the work is performed on a new rug or carpet, in which case the charge is taxable and materials used are purchased for resale. In the latter instance, if materials have been purchased tax-paid, a deduction thereof may be taken on the tax return. 5/24/54.

360.1000 Summer Camps. A summer camp operated by the [B] Foundation provides diabetic children with the opportunity to develop self reliance, increase their knowledge of diabetes management, and enjoy the camping experience. Approximately 1/3 of the children receive financial subsidy from voluntary donations. The following factors are pertinent to transactions involving the camp. (1) The Foundation qualifies for the "welfare exemption," but the camp does not make, assemble, or prepare any items. (2) The camp conducts regularly scheduled classes in a structured and formal manner covering a variety of topics including diabetes monitoring and control with attendance required of the campers. The classes are taught by qualified instructors consisting of physicians, nurses, and dietitians. (3) Employees' meals are credited toward meeting the wage requirements. (4) The camp store pays tax on all purchases of taxable toiletries and sundries, and sells them at cost.

Based on the above, (1) the camp is not a charitable institution qualifying for the exemption described in Regulation 1570(a), (2) the sales of employees' meals are taxable, (3) the camp qualifies as a school making exempt sales of meals to "student" campers, (4) the camp may take a deduction for the cost of tax-paid property resold, and (5) the camp is a retailer and should obtain a seller's permit and issue resale certificates to suppliers of items to be resold to the campers. 8/11/86. (Am. 2011-1)

360.2000 Taxidermists. The tanning of an animal skin by a taxidermist for the purpose of preparing it for mounting does not constitute taxable fabrication or processing.

This includes the tanning of a bear skin for the purpose of converting it to a rug or wall hanging. If the skin is tanned for some other purpose, such as converting a deer hide to leather, the charge is taxable. Tree limbs, plaques, wood and iron stands, and hardware used by taxidermists to mount the stuffed animals constitute "materials used in mounting" and are consumed by the taxidermist. 12/3/58.