Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales And Use Tax Court Decisions

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Union Oil Co. v. State Board of Equalization . . . (1990)

Petroleum Coke Sales Exempt from Taxation as "Waste By-Products"

Taxpayer refined crude oil into finished petroleum products, and sold petroleum coke as a solid by-product of the refining processes. The coke taxpayer produced was classified as fuel-grade petroleum coke, and taxpayer sold it to a customer who used the coke as a fuel in its chemical manufacturing facility. Taxpayer sued the Board for a refund of sales tax imposed on the sale of the petroleum coke.

The court of appeal agreed with the taxpayer that the petroleum coke was a waste by-product within the meaning of Revenue and Taxation Code Section 6358.1 and, therefore, exempt from sales and use tax. The court found that the petroleum coke was an undesirable fuel source and that its commercial value was minimal. Union Oil Co. v. State Board of Equalization (1990) 224 Cal.App.3d 665.