Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 295.1810


295.1810 Vine Cuttings. A taxpayer operates a nursery. Annually it plants vine stems in the ground to be grown for nine to ten months. After a few frosts, the plants are dormant. The taxpayer digs them out of the ground and ties them into large bundles and the stems are placed in temporary storage.

Orders for the majority of the vine stems were taken prior to the planting. However, the plantings are not identified to any specific customer. Once the rootings are dug up, the customers are notified to pick up their order. Most customers pick up the untrimmed rootings. However, in about 10% of the cases, the taxpayer trims the rootings prior to delivery. The customer is billed separately for the trimming service.

The taxpayer stated that the trimming was done because the unusually wet weather delayed planting. The delay during warmer weather caused unwanted sprouting.

Title to the stems did not pass until after the trimming. Accordingly, the charge for trimming is part of gross receipts. Even if title had passed, the charge for trimming would be taxable processing labor. (Regulation 1526(b).) 1/6/84.