Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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I

315.0000 INSTALLING, REPAIRING, RECONDITIONING IN GENERAL—Regulation 1546

Annotation 315.0710

(c) MISCELLANEOUS REPAIRS

315.0710 Reboring of Pipe Mold. In its production of cast iron pipe, a foundry purchases new steel pipe molds. These flask molds are 10 feet in length and come in various sizes capable of producing cast iron pipe ranging in diameter from 1½ to 8 inches. The average life of a pipe mold is 600 to 1000 castings, after which the mold becomes so pitted that it is no longer usable. Except in the case of the molds for the largest size pipes, the new pipe molds contain sufficient steel to permit them to be rebored once. This reboring process doubles the life of a mold and enlarges its interior dimensions, resulting in the production of a larger pipe. For example, 1½ inch and 2 inch pipe molds were rebored to make 3 inch molds.

The reboring process which extends the life of the molds and which, necessarily, also enlarges them, should not be considered fabrication or creation of tangible personal property. The dies are in a completely fabricated condition when originally purchased. The pipe molds are specifically designed and purchased with the idea of extending their life by reboring. The alteration in size of the molds which results from the reboring process is not a substantial modification and their use remains essentially unchanged. Aside from the enlargement of the interior dimensions, the molds are, in fact, restored to their original condition. Reboring is the only practical way of performing this restoration and it is not a substantial change as to be considered fabrication. The reboring process constitutes repair and reconditioning labor and is not subject to tax. 12/28/79.