Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Sales and Use Tax Annotations


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P

435.0000 PRODUCING, FABRICATING AND PROCESSING PROPERTY FURNISHED BY CONSUMERS—GENERAL RULES—Regulation 1526

Annotation 435.1227

(c) MISCELLANEOUS OPERATIONS

435.1227 Platinum Corporate Pool. An oil company has entered into a pooling arrangement with its various corporate subsidiaries in regard to platinum held by the platinum catalyst manufacturer. The oil company owns all of the platinum maintained in stock with the out-of-state catalyst manufacturer. The subsidiaries draw on this pool, exchanging platinum in their spent catalyst stocks for platinum in the fresh catalyst. Title to the platinum in the spent catalyst passes to the oil company when the platinum enters the pool. Title to the platinum in the fresh catalyst is in the subsidiary when it is in the subsidiaries' refining unit.

Under this arrangement, the acquisition of the platinum from the subsidiaries by the oil company is just as much a "purchase" as would be the acquisition of platinum directly from some other party.

Therefore, if the platinum is then brought into California, it would be subject to tax where the plutonium held in the pool was ex-tax. However, when the platinum pool is part "California tax-paid" and part "ex California tax," the major oil company may bring into California for use here without payment of tax an amount of platinum equivalent to the amount of tax-paid platinum maintained in the pool at the time the withdrawal is made. 4/7/71.