Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
195.0000 CONTAINERS AND LABELS—Regulation 1589
(a) IN GENERAL—NONRETURNABLE CONTAINERS
195.0312 Containers Used in Handling and Testing Activities. A TO-5 carrier and an integrated circuit device (I.C.) go through various steps in a manufacturing area including:
(1) An I.C. is put into a TO-5 carrier after the I.C. comes from the manufacturing area.
(2) The I.C. and carrier go through an electrical test. The I.C. is removed from the carrier, and the I.C. is plugged into a burn in board for burn in.
(3) The carriers are put into a box and taken to another table where the I.C.'s in the burn in board come out of burn in. The I.C. is removed from the burn in board and put into a TO-5 carrier of the same type, although probably not the same carrier as before the burn in step.
(4) I.C. and carrier go through another electrical test. The I.C.'s are marked while in the carrier, and the I.C.'s with the carriers are put into an oven to dry the ink from the marking procedure.
(5) I.C. and carrier are packed in a poly bag and shipped out to the customer.
Under the facts as described, the use of the containers in the handling and testing activities do not amount to a substantial use where the containers are ultimately used as nonreturnable shipping containers for the I.C.'s. However, this would not be true where the TO-5 carriers are used to ship a different type of I.C. than that which was tested in the container. 2/29/80.